BancBoston Robertson Stephens Reiterates Buy Rating on CNCX
- Intensive Applications Make Concentric an Attractive Valuation Play -
SAN FRANCISCO, Aug. 9 /PRNewswire/ -- The following is being issued by BancBoston Robertson Stephens, a member of the National Association of Securities Dealers, CRD number 41271:
BancBoston Robertson Stephens senior eCommerce services analyst Rick Juarez today reiterated his Buy rating on Concentric Network Corp. (Nasdaq: CNCX - news). Concentric, headquartered in Cupertino, Calif., is a leading provider of integrated Internet access and hosting solutions for individuals and companies seeking to outsource their access and hosting requirements.
''We are reiterating our Buy rating on Concentric, as we believe the company is well-positioned to capture the opportunity in the booming DSL markets,'' said Juarez. ''Concentric's sales of fat DSL pipes, position the company to sell fat applications to their installed base of customers. We also expect the company's revenue to be propelled by the growth in businesses establishing Web sites.
''In addition, we anticipate greater penetration and revenue contribution from Concentric's strategic partnerships (e.g. Microsoft, SBC, Williams and Teligent) to begin modestly in fourth-quarter 1999 and to become more meaningful in first-quarter 2000,'' said Juarez.
''We are fine tuning our estimates, while keeping revenue projections relatively unchanged,'' said Juarez. ''We are taking our 1999 and 2000 earnings-per-share estimates from ($2.67) to ($2.76) and from ($2.05) to ($2.11), respectively, reflecting:
1. increased sales and marketing expenses in third-quarter 1999 due to co-
branding of MSN portal,
2. reduced net interest expense following the gain in interest income from
the $50 million investment from Microsoft and
3. upwardly revised-preferred-stock-dividend and amortization schedule.
''We reiterate our $45 near-term price target based on 7.2 times 2000 revenue and believe Concentric's shares represent an attractive valuation play in the Virtual Bricks(TM) marketplace.''
Clients interested in receiving a copy of Virtual Bricks(TM) and other information should contact their salesperson at 415-781-9700.
BancBoston Robertson Stephens, the section 20 subsidiary of BankBoston (NYSE: BKB - news), is a leading international investment bank focused on growth companies in the technology, life sciences and healthcare, information and business services, retail and consumer products, real estate, media, telecommunications, broadcasting, and gaming and lodging sectors. The firm's 45 equity research analysts cover nearly 700 companies. Since its founding in 1978, BancBoston Robertson Stephens has raised over $52 billion in initial public offerings, follow-ons and convertible offerings. The firm has also assisted in over 400 mergers and acquisitions transactions valued at more than $77 billion. BancBoston Robertson Stephens began its high yield securities business in February 1997 and since that time has completed 69 transactions, including 15 lead transactions, raising more than $12.6 billion. BancBoston Robertson Stephens has offices in San Francisco, New York, Menlo Park, Boston, Chicago, London and Tel Aviv.
The following synopsis is qualified in its entirety by the more detailed information contained in the full research report, including the discussion of certain risks associated with an investment in this security contained in ''Investment Risks.''
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SOURCE: BancBoston Robertson Stephens |
