B) Is portal got the connections
Rated a BUY
Reason for DD
Mars bought it to my attention last night. Passed on first scan.
Business
Portal builds the business infrastructure for the Internet by providing the customer management and billing software for Internet and next-generation communications services. Portal's Infranet® software links Internet/IP services, subscribers, and revenues enabling service providers to rapidly develop, price, and provision new services and effectively manage customer usage and billing in real time. Service providers can generate more revenue and be more competitive with Portal's flexible technology by bringing new services to market quicker than ever before and innovating new ways to fulfill customers' needs. Headquartered in Cupertino, California, Portal has offices located in cities worldwide including Beijing, Hong Kong, Tokyo, Sydney, London, Munich, Madrid, and Paris.
Customers
Portal's customers include the following:
 Internet service providers (ISPs)
 Telecommunications providers
 Emerging Internet service businesses
 Enterprises offering online services
Demon Internet, Flashnet, France Telecom, Global Center, Glocalnet, HSA, ICL, I-Net Bridge, Juno Online Services, NatWest Magex, Northpoint, NTT, OzEmail, Palm Computing, PSINet, Qwest, Rhythms Netconnections, Shanghai Online, Telecom Italia, Telenor, US WEST, UUNET, and Viag Interkom.
Partners
CSCO, HWP, CPQ, LU, NT, RBAK, MOT, SUNW, ASWX, BEAS, ORCL, MSFT, TIBX,
Competitors
Publicly traded competitors include Lucent Technologies (LU), LHS Group (LHSG) and Saville Systems (SAVLY). Per briefing.com. I see DOX as number one competitor.
News
CUPERTINO, Calif., (June 26, 2000)—Portal Software Inc. (NASDAQ: PRSF), a leading provider of business infrastructure software for Internet and next-generation communications services, today announced that it has signed contracts with three industry leading Chinese companies. These include China Railway Communications Company (CRC) and Ji Tong Communications Co. Ltd., two of the country's largest communication service providers, and Xinhua News Agency, a national Chinese news agency.
Cupertino, Calif., (June 19, 2000)¾Portal Software Inc. (NASDAQ: PRSF), a leading provider of business infrastructure software for Internet and next-generation communications services, today announce that Reuters, the world's leading information and news provider, has selected Portal® Infranet® software as the customer management and billing platform for its new Internet services. Reuters has announced a strategy to make financial markets accessible on the Internet through a series of new Internet services hosted by an e-commerce platform enabling both business-to-business and business-to-consumer relationships.
Supercomm, Atlanta (June 6, 2000) ¾ Alcatel (NASDAQ: ALA), a world leader in DSL solutions and Portal Software Inc., (NASDAQ: PRSF), a leading provider of business infrastructure software for Internet and next-generation communications services, today announced a global alliance for IP billing. As part of the alliance agreement, Alcatel will market, distribute, integrate and deploy customer care and billing solutions for worldwide IP and data telecommunications service providers, based on Portal's IP billing solution, Infranet®.
CUPERTINO, Calif., (May 18, 2000)—Portal Software Inc. (NASDAQ: PRSF), a leading provider of business infrastructure software for Internet and next-generation communications services, today announced that Sprint Canada Inc., a wholly-owned subsidiary of Call-Net Enterprises Inc., (TSE: CN and CN.B; NASDAQ: CNEBF) is Portal’s 200th customer. Sprint Canada selected Portal’s customer management and billing platform to support Internet-based business-to-business products and services, becoming the 200th customer win for Portal since the introduction of Infranet® in 1996. Portal established its market leadership by closing significant business with leading providers of Internet services such as US West, Qwest, UUNet, Inktomi, Juno Online, Palm Computing, Deutsche Telekom, France Telecom and Covad Communications.
Analysts and Other
30-Jun-00 BEFORE THE OPEN
Portal Software (PRSF) 61: CSFB reiterates STRONG BUY rating and 12 month price target of $80; flexibility and partner relationships have positioned company significantly ahead of the competition; expected to grow at rates in excess of 50% through 2001.
29-Jun-00 12:10 ET
Portal Software (PRSF) 58 5/8 +3/4: Hearing from trading floor contacts that company has signed a significant deal with a Japanese firm; no confirmation of who, how much, or even if it's true.
6/23/00
Portal Software (PRSF)
Anyone selling broadband (DSL or cable) or ASP Services has to be
able to bill for it. PRSF is the undisputed leader in real-time
billing infrastructure. Portal creates a host of management and
billing software for Internet applications.
Its partners read like the Who’s Who of tech companies: Cisco,
Compaq, Sun, Oracle and Microsoft. Portal had more than $100 million
in sales its first public year.
 Three hundred eighty-five percent growth qtr. to qtr.—37%
increase over previous quarter.
 Seventy-nine million dollars in annual revenues in just
three years.
 Cisco and HP purchased minority stakes at higher than
current prices.
 Cisco has hardwired PRSF software into their systems—key
advantage.
 US West, Qwest, Covad, HP, Cisco, Bell South, France
Telecom, Deutsche Telecom all using the software with their
customers.
 DSL growing from 1 million to 20 million installations in
2003.
 PRSF is an ASP play, too—20 new ASP customers since
January including Cisco and Microsoft.
06-Jun-00 14:31 ET
Portal Software (PRSF) 49 27/32 +1 29/32 (+4%): Quiet trade slightly off the early high. Failure to take out the 38% retrace off the Feb high and the overdone intraday posture argue for a limited upside short term. Pullback expected to be temporary with congestive support at 48/46. A break of the retrace barrier above points to 55 (100 day simple moving average) and 57 1/2 (50% retrace).
19-May-00 11:27 ET
Portal Software Inc. (PRSF) 43 +4: In today's market environment, it is very difficult for stocks to move higher, even if they deliver better than expected quarterly results. In fact, many companies that reported higher than projected earnings last night (i.e.., Westell Technologies, Ciena, National Computer, Network Appliance, and Niku) are trading lower this morning as investors are quick to take profits and sell the stock on the good news. However, one issue that is bucking the trend today is this real-time customer management and billing software developer after Portal Software delivered another positive report in which the company posted its first operating profit of $0.02 per share, besting expectations by three cents. At the same time, revenues for the period expanded by a significant amount, 232.9% from a year ago and 29.7% sequentially, to $50.6 million. Given that most analysts had been expecting top line to equal no more than $44 million for the quarter, the significant surge in sales comes as a definite positive surprise. This follows last quarter's revenue growth of 252% on a year-to-year basis and 39.1% sequentially. Hence, even as the sales numbers have grown in magnitude, PRSF has been able to maintain a rapid sales pace, making the sequential gains that much more impressive as its billing software has generated interest among major corporations that are expanding their online operations. At the same time, a year after becoming a publicly traded company, Portal Software has managed to turn a profit at a time when the company has significantly ramped up expenses in order to more aggressively market its products and invest in future customer management and communications services. While the stock is still well off its earlier high of 86 (the stock has already had a 2-for-1 stock split in January of this year), the stock is on the mend, having rebounded from a recent low of under 30 just last month. And the prospects look good that Portal Software will be able to keep its strong growth momentum going in future quarters as the company builds a solid blue-ribbon customer base. Already Morgan Stanley Dean Witter and CS First Boston have reiterated their "strong buy" ratings on the issue, while Chase H&Q has reiterated its "buy" rating. - Raul Nicho, Briefing.com
18-May-00 09:42 ET
Portal Software (PRSF) 43 3/16 +2 1/8 (+5%): Company signs Sprint Canada as a customer. Sprint Canada will use Portal's customer management and billing platform to support Internet-based business-to-business products and services.
17-May-00 11:00 -- 12:00 ET
Portal Software (PRSF) 39 1/4 -2 1/2: Merrill Lynch reiterates NT BUY/LT BUY rating and price target of $90. Expect Portal to report another excellent quarter when it reports its Q1 results on May 18th. Analyst believes that Portal will exceed his revenue estimate of $41 mln by over 5-7%; also believes that the company will achieve profitability for the second straight quarter (versus his loss estimate of $0.01).
08-May-00 BEFORE THE OPEN
Portal Software (PRSF) 43 1/8: CIBC World Markets advises buying shares of PRSF before their quarterly results are released on May 18; believes PRSF will report another strong quarter which could beat both their revenue and EPS estimates of $42 mln and $(0.01), respectively. Demand for IP-based infrastructure products remains robust throughout the market. Rating is STRONG BUY, price target is $115.
March 1, 2000
Also of interest are stocks with scalable business models.
Scalable means that revenue increases faster than operating expenses. Most companies achieve scalable models by linking their revenues to the revenue growth of their companies.
Portal Software (PRSF), for example, made a very strong presentation about its prospects for sales of billing software. Portal's software is used for real-time billing of subscription services, such as cell phone time usage, or other subscription based services based on time or usage.
A key component of Portal's proposition, to investors, is that Portal's model includes three components of revenue:
 Initial license fee: upfront, for general permission to use the software
 Maintenance fee: ongoing, for support and upgrades
 Per customer component fee: When a new subscription customer is added, Portal receives an additional fee
The first two revenue components are traditional software models. But the third component is what appeals to money managers. Without out, Portal would look like any ordinary software company, and software is no longer in fashion. With it, Portal has a scalable model, as the incremental revenue comes with almost no additional cost of goods.
Scalable models get the highest multiples in the market
Numbers
Rev 15.2M to 20.8M to 28.1M to 39.0M to 50.6M Apr00
EPS (0.02) to (0.01) to 0.00 to 0.02 Apr00 per briefing.com
52-Week Low on 5-Aug-1999 $17.125
Recent Price $63.875
52-Week High on 24-Feb-2000 $86.00
Market Capitalization $10.3B
Shares Outstanding 161.6M
Float 92.1M
Price/Book (mrq) 47.67
Price/Earnings (ttm) 31,937.50
Price/Sales (ttm) 69.60
Short Interest As of 8-June-2000
Shares Short 951.0K
Percent of Float 1.0%
Shares Short (Prior Month) 797.0K
Debt/Equity (mrq) 0.01
Total Cash (mrq) $195.9M
DOX’s Numbers for comparision
Price/Book (mrq) 40.44
Price/Earnings (ttm) 136.57
Price/Sales (ttm) 18.39
Revs 147.8M to 164.9M to 182.8M to 235.5M to 270.7M per daily charts
Insiders
48 insider sales since April 2000
Institutions own 43.8% up from 7.8% three quarters ago.
Janus, Fidelity, MSDW, are top ten holders
Internet Posts of Note
10:00 ET Portal Software Inc (PRSF) 79 +3 5/16 (+4%): Climbing on news that Inktomi will utilize company's billing software in its new mobile wireless offering. 3/4/00 on SI
Portal Software may be a big winner here, too. With a $12 billion market cap, it is hardly a small company any more, and with a soaring stock -- it has quadrupled since last fall -- it's not an unknown. But Portal Software's customer-management and billing software is getting a lot of attention from major Web operators. I've been long Portal Software for some time, and expect to see it turn into a 10-bagger for me over the next year. Getting an early position in m-commerce, and the wireless market generally, is an important step for Portal, too. (Yes, the name stinks. I think it's clear many investors confuse Portal Software with companies trying to become Web portals -- a space long ago sold out. Portal's sag a couple of weeks ago, when portal stocks generally were getting killed, confirms that. Portal fell from around 84 to 69, then struggled back up to the low 70s, on no material news. My guess: The confusing name costs 'em, on average, 20 points at the current share price. You can laugh at their naming problem -- or see the current price, still 10% below its late-February high, as a buying opportunity.) 3/18/00 on Yahoo
We love Portal Software (PRSF:Nasdaq - news - boards) as a billing company, but Amdocs (DOX:NYSE - news - boards) got more competitive with its recent purchase of Solect, making the customer-billing business awfully tough overnight. 4/3/00 on SI
What the hell is going on!!!!!! It's absolutely depressing and disgusting. 4/4/00 on yahoo
I'm not a technician, not an expert in the stock market. I do have however, 20+ years as a public and private accountant. My reasoning for investing in PRSF is this:
1) Internet and wireless growth.
2) Billing is indeed complex. You really can't appreciate how complex until you spend some time in the controllers office of one of these companies. It will humble a PHD. The volume of transactions and the detail is staggering.
3) If you can't PROPERLY bill it, you'll never collect it.
I am long, without margin. This reduces my risk considerably. My holding period is six month minimum for my first evaluation of the stock. Last year PRSF lost $.09 per share. Consensus for the 1Q is ($.01) per share. This means they are not burning cash at the remarkable rate that some other internet companies. If PRSF misses the ($.01) in this nervous environment, it could hit the stock hard. 4/12/00 on RB
Damn it. About 22 points drop in about 2 days?? that means by Friday PM, PRSF will no longer be worth anything!!! This sucks!! I bought more today at 41 & 40, and thought itwas a good deal, but it is 38 now, so ...... Will AMD's strong earning help the tech sector tomorrow? 4/12/00 on RB
PRSF Is the most compelling stock out there right now. I trade with Merrill Lynch and have access to there world renowned reasearch dept.They hold a lot of this stock but they have no advisory opinion on behalf of POrtal Software which makes there opinion unbiased. As quoted by there anyalyst M. Fernandez VP of Merrill Lynch this is A MUST OWN STOCK. There sequential qrowth is unbelivable there year on year growth is quadruple through 2002. They are going to report on May 18th. Merrill expects them to top there upside earnings and revenue by at least 10%.They have the leadership and ist out advantage. Staggering growth forecasts. I expect a breakout shortly. This quater alone over 50,000,000 shares were bought by institutions. I f you have noticed the stock has not been moving very much in both huge up and down days ,this in my opinion is MMs are loading up big time.I feel this software company is a new gorrilla. They are running earnings and revenue neck and neck with Verisign. Verisign split once last June and traded sideways for a few months then exploded. I have a friend who is a VP at Verisign and said the same pattern is following suit with Portal. This puppy is abput tp blast offf. Prediction: 60.00 by earnings. Profit taking down to 48.00-55.00 then a complete breakout by October to Verisign Levels 600.00 pre split. Merrill knows this a a huge winner and also list this stock on ther TOP 10 Tech special reports. Its free just call Merrill up and ask for there top 10 tech recomendations. Again dont be left out this is the won. 4/28/00 on RB
regarding amdocs, prsf exec. pointed out that it is a service company, not a product company like portal. i interpret that to mean that portal's business is much more scalable than amdocs (therefore, much greater operating margins). 5/18/00 on RB
conference call con't.
Pipeline strong across the board. They have "never felt better about the co.' prospects". License fees are rising, those license margin fees are 98%. Average contract is $700,000. Existing revenues up 234% yoy.
Questioned about 3rd party influence, ie csco. They are a major player in future growth. They are they key that opens the doors to future customers! (imo AOL may be next) The HSAC and broadband are expected to be major growth and revenue for prsf, as they charge per customer, as opposed to a lisence agreement. So as the base of customers grow, so does the revenues. Wireless, as in motorola, snra, sony etc.....the embedded market is just begining. Their alliences are set to make them\us money! Application based interest, ie 3rd party coalitions, that move from the home to the office to the car to hand held devices, will create a constant stream of new revenues. I can only share that all the brokerage houses were covering the call. For PRSF to chalange the competition, on more than one occasion, by putting their #'s out for all to see, says "here I am"!!! 5/18/00 on RB
Well, goldman sachs was the lead banker and they were at $185mm for this year and just took it to $242. They initiated coverage of PRSF about 1 year ago and their original estimate was ~ $110mm. So the stock is up 70% over the last 12 months and the estimate is up well over 100% and we are closing in on the end of the fiscal year. GS has CY01 revs (FY02) at $390mm right now. That number will go north of $500mm over time. $7b market cap with $500mm next year gets a 14x forward revenue multiple. How much to pay for THE internet billing franchise??? Tough.... I'm long. 5/19/00 on SI
Did you see $40 just now? Eom 5/23/00 on yahoo
Chart
Big days are green. Last five days are green. Nice stack 10/50/200. Macd positive since June 2.
Links
portal.com
Summary
A lot of hype and games on this. Name messes people up so many haven’t done much DD on it. #1 in sector for billing. E-commerce infrastructure software stocks still below March high. I see a young SEBL here. Just starting to become profitable. Partnerships list is impressive. Only negative is the insider selling, but IPO a year ago so many may have sold to lock in profits. Higher Price/sales than DOX, but PRSF is growing 30% sequentially where has DOX is not. Looking for a dip to buy. Upside is $87, Downside is $55 for the short term.
Jack |
