DACG peer group: The closest I could come to a peer group isn't really close at all
biz.yahoo.com
I haven't found a direct competitor [Ford vs GM like] in the ERP training space that's publicly traded. This doesn't mean they lack competition. From the K "Principal competitors for the Company's services include the consulting practices of the large international accounting firms, the in-house service units of the ERP vendors, the professional services groups of many large technology and management consulting companies, and smaller niche service providers"
I did a net search [ERP SAP consulting training] and came up with private companies and big 6 sub-groups, but not eye-to-eye listed equivalents. For financial comparison purposes, some of the computer service companies in the yahoo link above may work.
One source of future competition would be the y2k remediation companies as they come face to face the the dreaded year 2001 problem: "What the hell do we do now?" ERP consulting, because of the post 2000 growth potential, might be on their brainstorm list. All they gotta do is get a bunch of Cobol geeks to learn SAP and how to train people on it....wait maybe that's not such a big hairy threat after all. In fact, they may be a source of employees and put downward pressure on labor cost for DACG.
On the conference call, DACG management responded to several analyst questions about the extent that competitive pressure or pricing might be eroding their business. The consistent response was that they weren't losing or missing the deals, the deals were being delayed because of y2k concerns....the pipeline is good and continues to fill with pending projects, but implementation is stretched out. Fortune 500 companies that are big part of DACG's biz, are, according to DACG, becoming more apprehensive about y2k troubles and the IT departments don't want to fight 2 wars at the same time. It rang true to me, but I've been snookered before. Anyway, the optimistic scenario is that they go into 2000 with a backlog of delayed activity that, when implemented, provides boffo comparisons with this years saggy numbers.
One of aspects of their financials that troubles me is the unbilled receivables. Apparently it's a not uncommon practice in the software biz, but it's still weird. From the K "Unbilled revenue represents the revenue earned in excess of amounts billed" Huh? This is the kinda thing I look for in a good short and one the reasons I had no interest in DACG at 11 - 12. But at 5 - 6, I'm overlooking it if it doesn't get bigger.
Thanks for your interest and comments,
bob |
