Karl: Please elaborate... I'd like to better understand the models that would put a *long term* price in the $22 range. Not to say we might not see high spikes, but I think it likely we'll see some flattening or decline in earnings 12-18 months out, followed by re-establishment of growth a couple quarters thereafter. I don't disagree that it is possible in this very wacky market, but then again, there doesn't seem to be any logic to valuations these days...
Here's two extreme scenarios that make it difficult to gauge TAVA's valuation:
On the low end, let's look at the acquisition price of Mangan (arguably in TAVA's core business, and not significantly smaller), for example, as a percent of their revenues. You've suggested that they went for about $2MM on $12MM or so of revenues. Apply the formula on a macro scale to TAVA. At $150MM revenues, they'd garner an acquisition price of $25MM ($1.00 a share). Obviously not the case. Add a multiplier just to be nice <g>. Still way short of even my #! So that's the bottom end...
Let's also try a comparable on the upper end, which might be Sapient (SAPE). These guys somehow managed to get a billion dollar valuation (currently trading between $60 and $70 a share) on revenues slightly less than TAVA, almost the same shares outstanding, but at higher margin/earnings (though '99 should even the earnings picture between the two). So now we have an upper edge.
Needless to say, tough to triangulate between the two points ($1.00 and $70.00) and make any logical conclusions other than "it'll fall in between the two". <g>
Time will tell. I have a few ideas to help them replace the Plant Y2K One software revenues that I'll be discussing with them in the next month or two. Trying to track Kevin down is tough, though!
See ya. |
