Run to $20, page-27

angryprawn,

I'm not a technical trader, my view is most of that is garbage for future purposes. Even worse is the 'Elliot Wave' theory rubbish you see on HC.

I've not put forward my own SP target - you did. I was asking about how you arrived at your rather specific target of $3.70. You responded with a comment about using DCF with a terminal rate equal to a WACC of 9.7% Maybe I'm just dumb and the finance I studied at uni was wrong, but that didn't make a lot of sense to me. Personally I don't think a DCF model is appropriate for EOS because it doesn't have a sufficient earnings history with the kind of contracts in place that people are buying this stock for. How did you arrive at a 9.7% WACC? Is it in their reports? What mix of debt/equity did you use? Last equity raising of $8m was at big discount of 2.20.

I normally used EBITDA/EV ratios when valuing companies in a sector, but I''m not sure what direct competitors EOS really has to use that kind of valuation.

Until EOS has multiple contracts in place - and I agree that's not certain - I think a simple P/E is about all that you can use, with the only variable being how many contracts of $X value over Y years you want to hypothetically award EOS to come up with the E part of the ratio. Then you can decide whether you're comfortable with a ratio of 10,20,40, or something else.

Last question - where do you get the 5-10 years figure from? Most ANNs I've seen discuss more like 3-5 years in respect of contract terms.

Cheers