This report is an updated version of the report published on 25 February 2025 at 12:38 PM AEDT.

Envirosuite Limited (ASX: EVS)

EVS is a technology company specialising in environmental intelligence for sectors including aviation, mining, industrial operations, waste management, and water treatment. By integrating advanced scientific knowledge and innovative technology with industry-specific expertise, the company delivers actionable insights.

Recommendation Rationale – SELL at AUD 0.085

• Financial Highlights: Revenues from ordinary activities decreased by 0.2% YoY to AUD 29.49mn in 1HFY25, compared to AUD 29.56mn in 1HFY24, primarily due to lower non-recurring revenue during the period. The net loss attributable to members rose by 13.2% YoY, reaching AUD 6.52mn in 1HFY25, up from AUD 5.76mn in 1HFY24. This increase was driven by higher business operating costs and increased interest and finance costs on borrowings during the period.
• Trading Over the Resistance: EVS’ share price has surpassed its R2 level recommended on 24 February 2025.
• Overvalued Multiples: On a forward 12-month basis – key trading multiple (EV/EBITDA) is higher than the median of Technology sector.
• Market Risk: Regulatory risks involve the potential challenges of ensuring compliance with laws and regulations, while technological risks refer to the impact of rapid technological changes and potential cybersecurity threats that could affect business operations and security.

EVS’ Daily Price Chart

Valuation Methodology: EV/Sales Approach (FY June'25E) (Illustrative)

EVS might trade at a slight premium to its peers based on EBITDA growth in 1HFY25, increased gross profit in 1HFY25, expected ARR growth in next five years, and effective cost management. For conducting the valuation, the following peers have been considered: FINEOS Corporation Holdings PLC (ASX: FCL), Credit Clear Ltd (ASX: CCR), DUG Technology Ltd (ASX: DUG), and other have been considered.

Considering that the stock has surpassed its R2 level, rally in share price, current trading level, and risks associated, the share price can face consolidation at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current price of AUD 0.085 (as of 25 February 2025, at 11:30 AM AEDT).

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 25 February 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 5: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.