Green Earth is a very interesting little company. Although, I am long term very bullish on this company I believe the stocks current price is ahead of its current value. Green Earth has a lot to prove but out of the gate they look live a very impressive company. I rate the current management as excellent. Jeff Marshal, the company's CEO is a proven money maker. As I said above, the stock price is ahead of itself and it is discounting very rapid growth. Can they deliver? Only time will tell but obviously the market believes they can. It appears they are getting some major retail contracts as well as some impressive strategic OEM wins.
I expect the management to deliver to be sure but the current share price discounts major success . Currently the stock represents over a $200 million market cap. I believe this is a little extreme given that GETG hasn't yet made even $10 million in revenues.
I believe the market is currently representing a value that says Jeff Marshall can deliver on his > $1 billion in sales but I will hold off rating the stock a buy until we can see a couple of back to back quarters of sales doubling. I own the stock and will continue to hold it but I cannot recommend its purchase at these levels until they are producing over $10 million per quarter in sales. In addition to the high enterprise value / sales ratio, I believe we need to see some more information as to how the company intends to fund its growth. The lack of a strong balance sheet should also give investors pause.
Only time will tell. Currently I think investors should hold their positions but not add at current prices.
I have received positive feedback on their portfolio of products and they are very impressive. I expect great things from this company.
$2.49 (07/21/08)
