Energy One Ltd (ASX: EOL)

EOL Details
Energy One (ASX: EOL), which is a supplier of software products and services to wholesale energy, environmental and carbon trading markets, witnessed its stock price surging 84% in last one year (as at December 04, 2017) and has been hitting 52 weeks highs. EOL’s software has a leading position in Australia with 40% of all gas traded in the Australian market.

Despite the run-up, the market capitalisation is low, and the stock can be evaluated for delivering value. The group has also demonstrated a profitable position over last couple of years with recurring revenue through license fees or subscription services contributing to a good chunk of total revenue. For FY17, revenues were up 18%, underlying earnings surged 20% with net profit before tax rising 5%. However, net profit after tax was lower and fell by 34% at the back of one-off acquisition costs and overseas investments. The group has strong position in Australia and New Zealand, and its product Energyflow has been seen to be receiving good response in EU.

The group is banking on its next leg of growth through organic expansion and acquisitions. Its latest acquisition, pypIT has performed well; and expectations from Creative Analytics acquisition delivering on value are also strong. A boost is also expected in terms of expanded organic growth opportunities with many regulatory changes falling in place for the gas market. The stock looks to be a “Speculative buy” at the current price of $0.70


Financial Performance over the years (Source: Company Reports)

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