>>Instead of blowing out Q4 numbers like they did, they could have easily saved a little for Q1 and still had a great Q4 and a normal meet-analyst-expectations Q1. Instead they run a 4 minute mile for Q4 and then collapse on the finish line for Q1, forgetting that this is a long distance race. Get a new CFO.
Yup, they sure blew it. It seems especially bad if you consider the following: they closed one huge deal very early in Q4 (in December of their February quarter) which was related to an Oracle related sale push-out that should have gone in Q3 but Oracle whiffed on their quarter and that delayed some revenue recognition for MANU until Q4 (Feb). MANU made Q3 (Nov) and then coasted through Q4 (Feb) b/c of that Oracle deal. This gave me added confidence that they weren't stretching to make their Q4 number but rather that they were coming off a depressed Q3 result.
It could be because they didn't properly incent reps to close in Q1 or maybe that MANU underestimated how much customers could pause to see what SAP's direction is in SCM. They reportedly have deals in the pipeline that are "an order of magnitude" larger than before. Increasing selling cycle related to larger deals is the reason they are giving but this is disappointing as this is i2's strength, closing the late quarter megadeal. In any event, this was VERY poor execution at Manugistics. From such a visionary company, this is (needless to say) quite disappointing.
The revenue estimates were for $59-61mm for this quarter and about $310mm for the year ending 2/99 ($60, $66.5, $73.5, $110 = ~$310mm). They have about 30mm shares out so the market cap was $1.4b at today's close. My back-of-the-envelope guess is estimates adjust to something like $270, down from $310 (I'm assuming that they do something like $52mm this quarter rather than $60mm). Using the same multiple gets you a stock price of $41. Takeout value in a merger would likely be north of 5x revenues. Assuming a little momentum investor "get this out of my fund" selling tomorrow, its still hard to believe this stock sustaining a value below the high $30's, IMO. However, I thought the multiple was low before and so I am clearly not as pessimistic about the sustainability of the MANU franchise relative to the ERP vendors.
>>Get a new CFO
Sell the company to Peoplesoft please. |
