I think it’s as much about the prospects as it is about the current arr. the last 6 months have clearly been a foundation building time. They’ve picked their market segments, raised capital, brought in very promising partners, and are now in a position to push for further growth.
If they have kept up an annual growth rate of 100% this half I’ll be surprised. Possible but I wouldn’t count on it.
having said that even an annualised 70% arr uplift will be good IF it looks like they can maintain that or accelerate.
it’s pretty easy to grow into any sort of valuation if you are growing the top line at 70-100% pa year on year on year on year, with the gross margins they are aiming for.
I think valuation has become even harder. To pin down the chance of success in China is really difficult. If it doesn’t work out then they theoretically could be back down at 13c, but if it works out, then it could be a massive company in the future. Given the uncertain the peaks and troughs will be exaggerated, but I’m happy to hold on for the ride as long as the keep executing.
I don’t think Evs is the average SaaS company. Both in terms of the opportunity at their feet, but also in terms of their growth rate. so I don’t feel the 12.5x psr is too high for them.
EVS Price at posting:
21.0¢ Sentiment: Hold Disclosure: Held
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