Those numbers boost the company's lead over the nation's number two cable- modem service Road Runner, a joint venture run by Time Warner {TWX}, MediaOne {UMG} and Microsoft {MSFT}, to name a few.
By comparison, Road Runner recently posted a 28 percent increase in subscribers to 320,000.
"If you look at the numbers they are generating, this is a significant leader that is becoming the broadband provider of choice," says Stephens Inc. analyst John Corcoran. "The real question is not whether it will beat the road runners of the world, but if they can win the battle of cable modem versus dsl (digital subscriber line)."
Industry watchers want to know if consumers will call the local cable operator or the local telco provider for service.
Corcoran, who has a "buy" on Excite@Home and a 12-month price target of $100, believes there will be an open cable pipe down the road. Eventually, cable operators will see that the way to make bets pay off, is to get subscribers to enroll in as many services as possible, he says.
And they accomplish that, he says, by offering more flavors of ice cream in that pipe.
AT HOME CORP (NNM:ATHM)
Analyst
Opinions
Strong Buy 6
Buy 8
Hold 1
Sell 0
Strong Sell 0
Average
Recommendation
This Week 1.6
Earnings Per Share
Last Quarter N/A
Surprise 0.00
Percent 0.00%
Consensus EPS
This Year's -0.05
Next Year's 0.20
AT HOME CORP - ATHM ranks 85 out of 99. It is in the Internet industry.
Analyst Ratings compiled by Zacks
The bottom line, says Corcoran, is that the company has been doing everything right since the Excite acquisition. "They are filling out their portfolio as to what they can offer, be it cable operator, advertising, subscriber and content. But the market hasn't been rewarding them because of a federal judge's decision in Portland about open-access."
Prudential Securities analyst Paul Merenbloom says the Excite part of the equation brings in a lot of opportunities and compares the stock's recent performance to a "cat toy getting bounced around."
"People simply react to everything, but the issue is what's happening to their business model. People can't wait to get their hands on this stuff and they're buying it," says Merenbloom, who has a "strong buy" on Excite@Home.
The biggest challenge for the firm? Running faster.
Despite the company's large lead in broadband, the company will have to put on their running shoes and develop new strategies to compete with dsl, wireless and satellite.
"It's a dynamic marketplace," says Lou Kerner of Goldman Sachs. "It's a daunting task because they'll have to do this without taking their eye off the ball." |
