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Arctic Shores
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==== What are the assumptions used to estimate the return figure? ==== {| class="wikitable" |+Key inputs !Description !Value !Commentary |- |Which type of multiple do you want to use? |Growth-adjusted EV/sales |For the numerator, the Stockhub users believe that to account for the different financial leverage levels of its peers, it's best to use enterprise value (EV), rather than price. For the denominator, the Stockhub users believe that because it expects Arctic Shores to reinvest almost all of its revenue back into the business over the five year forecast period and therefore its earnings are expected to be abnormally low over the period, it's best to use sales. Accordingly, the Stockhub users suggest valuing its company using the EV/sales ratio. However, the Stockhub users think that to take into account the different business lifecycle stages of its peers, the most suitable valuation multiple to use is the growth-adjusted EV/sales multiple, rather than the EV/sales multiple. |- |In regards to the growth-adjusted EV/sales multiple, for the sales figure, which year to you want to use? |Year 5 |Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time. |- |In regards to the growth-adjusted EV/sales multiple, for the sales growth figure, which year(s) do you want to use? |Year 6, from now |Stockhub suggests that for the sales growth figure, it's best to use Year 6. |- |In regards to the growth-adjusted EV/sales multiple, what multiple figure do you want to use? |0.18x |In Stockhub's view, Arctic Shores closest peer(s) is Sova Assessment Limited. |- |Which financial forecasts to use? |Stockhub users |The only available forecasts are the ones that are supplied by the Stockhub users (the forecasts can be found in the financials section of this report), so Stockhub suggests using those. |- |What's the current value of the company? |Β£21.98 million |The Stockhub users calculate the valuation as of Β£21.98 million (for the calculation, see the 'Arctic Shores Series B valuation calculation' table in this report). However, according to Dealroom.co estimates, the firm valuation is between $30m and $46m ($38 million mean) as of January 2023.<ref name=":2" /> The Dealroom valuation is based on either of: the publicly disclosed value, or an estimate that is based on the last funding round amount, using similar rounds as benchmarks. |- |Which time period do you want to use to estimate the expected return? |Between now and five years time |Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time. |- |Which valuation recommendation method do you want to use? |Relative |There's two main types of valuation recommendation methods, relative and absolute. The relative method determines the investment recommendation relative to other investments (e.g. the investment is "suitable" if it's within say the top 10% of the investment universe in terms of investment returns), whereas the absolute method determines the recommendation based on a fixed return amount (e.g. the investment is "suitable" if it returns 50% or more). Assuming sufficient data, the Stockhub users suggest using the relative method. |- |Which top proportion of the investment universe constitutes a "suitable" rating? |10% |The proportion depends on the user's preference. That said, typically, the higher the proportion, the higher the risk associated with the investment. |- |Which universe of investments do you want to use? |All investments |If the main objective of the user is to maximise investment returns, then the Stockhub users suggest using 'all investments' as the investment universe. |}
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