Editing Openai/69109937-2170-8005-9304-da49840bb5b9 (section)

=== Assistant: Perfect — let’s reconstruct what those institutional buyers are probably assuming under the hood. ===
Perfect — let’s reconstruct what those institutional buyers are probably assuming under the hood.
We’ll reverse-engineer from their $7 entry and the typical expectations for late-stage growth hardware investments.

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To hit a 2–3× return, they need a market cap of roughly 1.2–1.8 B USD within ~3 years — say by 2028.

==== Typical valuation multiples for an established but still fast-growing photonics firm: ====
* EV/Sales ≈ 5–8× (comparable to Coherent, Lumentum, Infinera in high-growth years).
* EV/EBITDA ≈ 20–30× once margins are positive.

So to justify 1.2–1.8 B USD:

: 

That’s the ballpark these investors are implicitly betting on.

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If that trajectory happens, a market cap of ~1.5 B USD (≈ 14–18 USD per share) is very plausible — a comfortable 2–3× from their $7 cost.

==== | Outcome | Revenue (2028) | Valuation multiple | Market Cap | Share Price | 3-Year Return vs $7 entry | Comment | ====
|----------|----------------|--------------------|-------------|--------------|-----------------------------|
| Bear / slow ramp | 80 M | 4× sales | 0.32 B | 3–4 USD | −40–50 % | Yield or demand issues; dilution risk returns. |
| Base / solid ramp | 180 M | 7× sales | 1.26 B | 14–15 USD | +100 % | Matches institutional hurdle rate. |
| Bull / AI optics boom | 300 M | 8× sales | 2.4 B | 25–27 USD | +250–300 % | AI data-center adoption explodes; POET becomes key supplier. |

==== - Below ~10 USD → market doubts the ramp or sees delays. ====
* Around 12–15 USD → base execution success; validates the institutional thesis.
* Above 20 USD → full confidence that POET is scaling as a dominant photonics supplier in the AI interconnect boom.

So when the institutions paid ≈ 7 USD, they likely weren’t projecting “moonshots” — they were aiming for a doubling or tripling on disciplined execution, not speculative mania.
That also means they’ll tolerate short-term volatility as long as the manufacturing yield, orders, and revenue slope trend in the right direction.

Would you like me to extend this into a probability-weighted valuation table (expected value per share) so you can see what the blended “fair value” might look like given different ramp probabilities?