Versant has flipped to a EBITDA model of valuation for VRS and has a low end target of $10.50.
Source: http://www.theglobeandmail.com/servlet/story/RTGAM.20071220.WBmarkets20071220075353/WBStory/WBmarkets

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Versant ups Allen-Vanguard target
Leonard Zehr, today at 7:53 AM EST

It’s been a wild ride for Neil Linsdell. So far this month, the Versant Partners analyst has downgraded and upgraded Allen-Vanguard and sliced and diced the price target from $20 to $8.30. Now, with the release of AV’s quarterly results, he raised his price estimate on the stock to $10.50 from $8.30.

Citing significant amortization from recent acquisitions, he shifted his valuation to an enterprise value-to-EBITDA multiple from a price/earnings method to “more accurately reflect the value of the company’s ongoing operations and to account for the debt level,” he writes.

The new price target comes from using an 8 times EBITDA multiple, which he claims is at the “very low end of the comparable range” on fiscal 2009 estimates.

He figures that with “demonstrated profitability, expected improvements, [his] own more conservative forecasts and recent budget approvals in the U.S., [the] new target is reasonable and achievable.”

The stock finished at $5.08 on Wednesday.