Jerry and all:
Jerry, thanks for the number. I'll be sure to tune in.
look, I'm new this year to this stock, having come to it through Applix (IQ is one of Applix's TM1 resellers). looking at the chart I take it some extremely negative development happened late last year, or early this year, to cause the stock to tank. I expect that negative development was a poor prognosis for the end of last year, after having earnings climb throughout last year. someone more knowledgible please correct me if I am wrong.
regardless of estimates this quarter, the results still constitute a sequential increase of over 20%, or annualized, a current growth rate of 80%. perhaps we will, or will not, reach current yearly estimates of $.60, but even if we reach $.50, that would still constitute a nice year-over-year gain, and with an expected growth rate going forward of 30%, would imply that the stock is still somewhat undervalued here. also, current estimates for next year stand at $1.00. even if we cut that by 20% and make it $.80, then the stock is still worth $24.00 based on next year's estimates.
most importantly, I believe that this year we are on the earnings ascendancy, whereas last year we were looking at a decline. as indicated, the press release does sound optimistic. by the "quality revenue stream" comment, I think that this is reflected in the fact that while license revenue has fallen year-over-year, support fees have had a nice increase. to me this implies that the customers they have this year are more likely to continue to contribute to earnings than the ones they had last year.
someone posted awhile back that a regional firm has been pushing the stock has a possible takeover candidate. I believe that a takeover is entirely possible based on their cutting edge web technology. the release states that reporting via the internet is perhaps a growing market of which IQ is well positioned to take advantage of.
I'd hate to panic in the morning because of a possible penny shortfall in the past quarter only to have the stock shoot up a little later based on the promise of the back half of the year, or because of a takeout offer.
I'm looking forward to the conference call, and, most of all, to the back end of the year. from what we know now, it seems a hard case to make that the stock is overvalued here. after all, we are still off around 40% from the 52 week high.
best regards. |
