I don't know if some of you have read the Goldman Sachs report from 27th Feb on this stock. They have put a price target on this stock at $3.40.
I can basically say that Paton Lane recycling, if it manages to complete before time, it would be a solid boost to earnings, and it is quite reasonable to expect that would open in FY19 sometime, based on where it is located. It should be easy for constructional activity there. I've toyed with these numbers from GS but fail to understand the savings on cost which will be achieved after having its own landfill solution. Now this is a money shot and move. That should definitely put EBIDTA margins higher. The model is just conservative as I see it.
Let me put this into an easy example for understanding purposes. If you own a coffee shop and made one, and you've been buying doughnuts from another supplier to sell it as a combo (coffee+doughnut) at your shop, and you made 30% profit from it by selling the combo, would your margins increase if you started making those doughnuts in your own shop as per your convenience and then sold it with coffee at the same price? or even higher, cause you may have a unique product now? I'd certainly think so.
As the valuation metrics does not factor in this key synergy into the model, I'm going to take this report to be a "little conservative.
