PRGN from the alert investor:
Peregrine Software (PRGN, 18.94, NAS), an ERP (Enterprise Resource Planning) and CRM leader, was at 35 two weeks ago and lost 6 points on Friday alone, on 8 times normal volume - a true selling climax. PRGN calls itself "the leading provider of eSupport tools for automated problem resolution and data protection". It is known for its award-winning ServiceCenter help desk software, which helps businesses monitor customer computer networks and equipment costs. Peregrine focuses its products around infrastructure resource planning software, designed to optimize a company's entire information technology system for e-business. Other offerings include software for managing corporate procurement and tracking inventory (AssetCenter), and automating corporate procurement (Get.It). The company expanded its e-commerce operations with the 2000 purchase of e-commerce software provider Harbinger. With the next year's (fiscal 2002, ending in March) consensus estimate at 75c a share, the stock is now selling at 25 times earnings, compared to a 44% EPS growth rate from '00 to '01 and top-line growth of over 80%. There are about 140M shares outstanding and 68% of the stock is held by institutions.
This is how CBS MarketWatch explained Friday's washout: "Melissa Eisenstat, an analyst with CIBC World Markets, said the selling was related to two concerns about the company's ability to meet its revenue goal, which CIBC puts at $145M. According to Eisenstat, the first concern is Peregrine's exposure in Europe, where up to 35% of the revenue it books in the region could be affected by the weak euro. The second concern relates to the company's integration of its acquisition of Harbinger, which Eisenstat believes may prevent there being much upside to Wall Street earnings views. Eisenstat remains "comfortable" with expectations for a [Q3] profit of 11c a share. Thomas Smith, Peregrine's SVP of global marketing, attributed the drop in the share price to a typo in a Deutsche Banc Alex.Brown morning research note that inadvertently included Peregrines ticker in a discussion about the tough environment for mainframe software makers. Smith noted that the note came from an analyst that didn't actually cover the company, and that subsequently a correction had been issued."
Friday's spike to 16.31 just about touched PRGN's May low, but there is good support in the 19-20 area. Barring an earnings shock, expect this stock to hit the mid-20's this week and to easily get back over 30 by early 2001. Earnings are due on October 19. |
