I like the 2nd model, P/E model in your post. It is fair and conservative to assume P/E 10, so 10 times next 3 yr average net profit is the market cap.

Lots of people like to talk in P/E's these days, but it's not really a reliable calculator and more of a rule of thumb:

John P. Hussman, Ph.D. [emphasis mine]:

http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/11/30/reckless-myopia.aspx

"Talking in terms of multiples can make the process easier to explain, and can be a reasonable approach to the market as a whole if earnings are normalized properly, but ultimately, an investment security is a claim to a long-term stream of cash flows. It is not simply a blind multiple to the latest analyst estimate."