The magazine that had touted this stock for two years has now
given up on it and rated it a sell. Hence, one more of the "magic 25"
of Individual Investor Magazine bites the dust. Next year when the list comes out, you can believe that the tech stocks on that list will be at the TOP of my list of short candidates ! At any rate, here is the article.....
IFMX Price (4/4, 16:30): $9.31
Informix
Symbol:IFMX Exchange:NASDAQ
Tel: (415) 926-6300
www.informix.com
Informix makes database servers and
software, including a database-
management product that screens for
images and sounds as well as text.
Trailing PE
13.50
52-wk high
$31.12
Mkt. Cap. (MMs)
$140
52-wk low
$8.48
EPS
$0.69
ROE
19.96
Price-Sales
0.16
L-T Debt-Equity
5.10%
ANALYSIS (Posted 4/2)
Informix announced preliminary first quarter
revenues will fall well short of last year, and
below analysts' estimates. Revenues are expected
to be between $130 million and $145 million, far
below a consensus estimate of approximately
$250 million and down 28% from the year-ago
figure of $204 million. As a result, Informix
expects to report a loss for the quarter. CEO Phil
White pinpointed the problem in Europe, but
cautioned that weakness existed throughout the
world. Informix plans to announce audited results
at the end of April. Informix's sales and marketing
division, which has been extensively reorganized
in the last twelve months and has seen substantial
personnel turnover, focused too much on the new
object-relational database technology, neglecting
the emerging market for databases designed for
Windows NT. The company as a whole appears
to have neglected its traditional products.
In addition to these shocking results came
downgrades from major brokerage houses,
specifically Salomon Brothers, Cowen,
PaineWebber, and Smith Barney. John Faig, an
analyst at PaineWebber lowered his rating to
'neutral' from 'attractive'. For the first quarter he
was expecting revenue of $257 million, and
earnings $0.13 per share. "This was a total
surprise," he said, "nobody knew the magnitude
of this loss." Faig noted that Phil White had
discussed prospects for revenue growth of as
much as 30% this year. Mr. Faig's new yearly
estimates are $0.30 per share for 1997, and
$0.65 per share for 1998, respectively lowered
from $0.78 per share and $1.01 per share.
Although the object-relational database provides
Informix with a compelling technological edge,
Individual Investor did not expect it to make a
strong impact on company revenues until late in
calendar 1997. I.I. felt that Informix's strong
revenue growth throughout 1995 and 1996 was
proof of its strong product line. We continue to
believe Informix has cutting-edge technology, and
we know it was the only database company to
gain market share in calendar 1996. The
weakness in the last quarter of 1996 was
disappointing, but did not point to the severity of
the problems Informix is currently experiencing.
The fourth quarter disappointment was primarily a
function of increased R&D and marketing
expenses, which squeezed margins. However,
Informix had shown impressive top-line growth.
Today, it seems organizational difficulties and an
overly optimistic management have severely
wounded Informix. Significant revenue from
object-relational databases is unlikely to
materialize until calendar 1998, and the company
must work in the meantime to stabilize existing
product-line sales. Informix is now rated a 'Sell,'
as our initial investment thesis is no longer valid.
(posted 4/02/97 with IFMX trading at $9.63)
NEWS & ARCHIVE
(1/24) Informix Sues Oracle
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