mmmmmm..... 48$ target.....
FS Van Kasper Initiating Coverage on Direct Focus, Inc. with a Buy Rating.
San Francisco, California
6/2/99
Eric Wold, CFA, Consumer/E-Commerce analyst at FS Van Kasper, initiated research coverage on the shares of Direct Focus (NASD: DFXI, $20 7/8) with a Buy Rating and a 12- to 18-month price target of $48.
The domestic direct marketing industry reached $1.37 trillion in 1998 and is projected to experience continued strong growth as acceptance with direct marketing and e-commerce continues to increase with consumers and businesses alike.
Direct Focus has successfully developed its direct marketing process into a "science" that we believe has become a fairly accurate predictor of customer interest, as well as an extremely successful process for converting initial inquiries into orders.
The company is well positioned within three large consumer segments: the home fitness industry, the mattress industry, and the commercial fitness industry. Going forward, management intends to further expand its product offering through additional product development and strategic acquisitions.
In January 1999, Direct Focus acquired Nautilus International, which not only positions the company in the commercial fitness market, but also gives it access to the most well-known name in the fitness industry.
With our continued strong growth expectations for the Bowflex product line, the initial development of the airbed division, and the integration of Nautilus, we are projecting fiscal 1999 and 2000 sales to increase to $113.7 million and $167.0 million, respectively.
We are estimating EPS of $1.68 and $2.38 for fiscal 1999 and 2000, respectively. This represents EPS growth of 31% and 42% for each of those years.
Even with EPS growth projections of 31% and 42% for fiscal 1999 and 2000, the shares of Direct Focus are currently trading at only 12.4x and 8.8x our fiscal 1999 and 2000 EPS estimates, respectively.
Additional information is available upon request. |
