My view is that the current price is fair value for the consulting arm. That type of business will never trade on high multiples, and five times EBIT would seem fair. Also, keep in mind the profit for FY14 was almost entirely the result of an R&D tax rebate - that in the accounts wasn't even received, it was just booked based on 'advice they had received.' So normalised EBIT is lower. That said if you believe in Envirosuite 2.0 you're getting upside of that for free here. I've met with the CEO and he was much more conservative than some of the things mentioned on here, but the potential is there. They'll need to raise capital to do it though, focus is on marketing.
EVS Price at posting:
8.5¢ Sentiment: None Disclosure: Not Held
