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Technology Stocks : CheckFree (CKFR)

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To: King David who wrote (1407)	1/29/1998 11:12:00 AM
From: Kurt Peterson	of 8545

You are right about mainstream acceptance of home banking and bill payment. It is probably used by < 1% of Americans today. But, if you listened to the most recent CKFR earnings conference call you heard Pete Kight say that he is comfortable with earnings projections that CKFR will break even this quarter and turn its first operating profit the following quarter. He also said that he is comfortable with subscriber growth in the 10 to 15% per quarter range. So even without mainstream acceptance yet, CKFR is heading in the right direction. Now imagine what the earnings will be 1,2 or 3 years from now if the growth rate does nothing but stay the same. The growth in earnings should be impressive. Then take into consideration all of the recent predictions about PC and internet usage and the growth in subscribers that CKFR will experience if that comes true. It will be even higher than the growth rate Pete says he is comfortable with. That, in turn, should yield even higher earnings growth. So, even if adoption by consumers stays at the rate it is today, CKFR's earnings will grow and the stock price should rise with it. If subscriber growth accelerates, earnings will grow even faster, and the stock price should follow.

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