Pinned straw:
I was a previous holder of EVS however sold out some time ago based on disappointing revenue growth and an apparent inability to control growth in expenses. I have not followed EVS since.
I followed the forum post link by @Remorhaz and watched @Strawman call EVS a buy.
I thought it best to go back and take another look at EVS.
Revenue growth FY23/FY22 8.3%.
Loss before tax has remained in the -$11M to -$12M range since 2021.
Q1FY24 ARR growth 10%.
The Q1FY24 Outlook Statement (below) was as vague as they come:
So, after adjusting the EBITDA and capitalising expenses and based and the exit ARR for FY24 they should be cash flow positive.
They had $8.2M cash at 30 June 2023. Capitalised development costs of $5.8M in FY23 increasing at 55.4% pa over 2 years. The cash balance will get very slim unless they can cut costs or greatly increase revenue.
My valuation model indicates EVS as currently overvalued.
I don’t see EVS as a company you need to be invested in at present. There will be plenty of time to jump in later if they manage to improve the financials.
The market too remains pretty sceptical @Byrnesty -- which is not unreasonable at all.
One point to clarify -- my read was that the adjusted positive EBITDA target was after accounting for the (very real) capiatlised development costs. ie. they are reducing EBITDA by the costs spent on development. Which would be far more reasonable.
When we spoke with him, Jason did expand on the expectation for "Management Operating cash flow" -- a metric that does account for capitalised costs -- to be positive on a run rate basis sometime this year.
I could be wrong, so please let me know if anyone else reads it differently!