I'm looking at a niche manufacturing business where the total addressable market is probably around $150M (revenue) right now, with some near term expansion opportunities to increase that to $200-250M. Given the much smaller market size and "cap" in potential, it seems like a discount would make sense as there's probably less interest in it from strategics given limited opportunity size. There's one small cap publicly traded company in this space and it's only valued at 6x net income. This company currently has <5% market share.

Curious if others have looked at similar niche market companies and have any experience with valuing these businesses?