Taken from the Yahoo board.. a analysts comments:
analysts comments 13314 of 13314
by: Big_Block_Buyer (48/M/New York, NY)
Spyglass appears to be grossly undervalued when compared to its closest peers. If the average market capitalization is used as a valuation metric, Spyglass stock should trade for $54/share. If the 1999 price to sales average is used, Spyglass should trade for $115 per share. In both cases, if the highest and lowest observation are removed, Spyglass shares would trade at $24.05 if based on market cap, or $45 if based on 1999 price to sales. We admit these numbers sound ambitious, and are likely skewed based Phone.com, Liberate Technologies, and Wink Communications being recent hot IPOs with limited float and limited company history.
Our financial model continues to be conservative with upside potential coming from the sale or IPO spin-off or the SurfWatch division. We estimate the fiscal fourth quarter to be a break-even quarter for Spyglass with revenues of $7.8 million. For fiscal 2000, we estimate revenues of $41.6 million and earnings per share of $0.19. We believe the company?s shares will continue to increase in tandem with future revenue growth. By using a comparatively conservative 1999 price to sales ratio of the software sector of 19.4 times, rather than the close peer average of 120.3 times implies a stock price of $33.56. Combined with Spyglass stock appreciating with in tandem with its forecasted compound revenue growth implies a price of $20. By taking an average of these two numbers, we initiate coverage Spyglass with a BUY rating and a 12-month price target of $27.00, 15.6 times estimated 1999 sales.
Fred C. Bush 512-306-5226 Jay W. Van Ert 512-306-5225
Blake Carter 512-306-5286 Michael Hidalgo 512-306-5255 |
