EVOL is consolidating in the 8-10 area, probably in a trading range for awhile. Longer term, this stock could see 12-13. I'm not afraid to buy in the 8s, but will carefully watch the performance of the NASDQ. A 10 percent correction will easily trim off 25% from the momentum stocks recommended by Tobin Smith.
The "momentum" high-flying tech stocks of 2003 have already suffered a much greater correction than the NAZ as a whole. Here is how EVOL stacks up against the bell-weathers SINA and DELL for the past three months:
Not really a good period for any of them. These stocks all have great earnings growth but got ahead of themselves during the rise of the Naz in 2003 and have been consolidating or going down for the past three months. The question is how much further down can they go. EVOL is selling at 15 times or less 2004 PE, which is a historically very cheap valuation. I think most of us are buying in ancticipation that money flow will return to the tech section later in the year and get these stocks revalued. A reasonable valuation for EVOL would be $15 to $16 IMO and this could happen very quickly. When money-flow returns stocks tend to rise very rapidly in narrow time-windows.
I can feel your pain but the bottom line is that the fundamentals on this company have NOT changed, and it is clear to everybody that it is undervalued at the current level. Its just a matter of time for it to form a solid base at which point it will make some strong moves forward. A reversal is imminent and will be significant, it's just a matter of when.