Manugistics Wins Multimillion Contract With Cisco, Analyst Says
Rockville, Maryland, Aug. 28 (Bloomberg) -- Manugistics Group Inc. shares rose 29 percent after the maker of software that links suppliers to manufacturers won a multimillion-dollar contract from Cisco Systems Inc., an analyst said.
Manugistics rose 18 to 80 in Nasdaq Stock Exchange trading of about 5 million shares, more than six times its three-month daily average. The stock have more than doubled this year.
The contract is valued at about $10 million initially, though it could grow to about $30 million to $50 million as Cisco deploys it throughout its trading network said Bert Hochfeld, a Josephthal & Co. analyst.
Such a win would represent a big step for Manugistics, as they compete with the industry leader I2 Technologies Inc., which sells software to allow customers to track incoming parts and to schedule production. The two companies were bidding against each other, Hochfeld said. Manugistics, I2 and Cisco didn't return calls asking for comment.
``This is significant because I don't think most investors regard I2 and Manugistics in the same breath,'' said Hochfeld, who has a ``buy'' rating on the shares. ``If they can play in the big leagues and can do a reasonable job of competing with I2, investors will recognize that.''
Dallas-based I2 fell 7 3/4 to 158 3/4. It's has climbed 62 percent this year.
The Cisco agreement could also generate more revenue for Rockville, Maryland-based Manugistics, Hochfeld said, as some of Cisco's larger suppliers may also begin to use Manugistics software.
``If this contract is for real, it could be a very important, high-profile deal for Manugistics,'' said David DuChene, a Wit SoundView analyst, who rates the shares a ``buy.'' The electronics market was one which Manugistics Chief Executive Gregory Owens has targeted for the more than a year.
DuChene said the market is big enough for both companies.
Aug/28/2000 16:47 ET |
