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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)

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To: John Mansfield who wrote (21315)	7/29/1998 2:29:00 PM
From: CalculatedRisk	Read Replies (3) of 31646

John, here is a simple answer to a complicated question: "In the past, the multiples were based on conjecture. Now there are hard numbers to base them on." Josef Svejk exchange2000.com Josef was discussing a different subject, but his answer fits. You are focused on the good news for TAVA (and there is plenty of good news), but the news also brings more realistic expectations. Ask yourself (this is NOT bear or bull stuff, just investor stuff) ... how much Y2K business do you expect TAVA to perform? One hundred Million in Y2K revenue? $200M in Y2K revenue? $500M in Y2K revenue? We know their gross margin is about 60% (excellent for a consulting company) and their after tax profits may be more than 10%. Work up the profit numbers - these will be your estimates. Divide by 25M shares. Add in a value for their core business (up the value if you think the business will increase after Y2K). I did this analysis ... and IMO an optimistic value is about $3 per share. What do you get? Regards, Bill

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