1) NETP – Rande, I think this stock will be like gold this year. I will be joining everyone as a shareholder this week. Any thoughts on entry.
2) HEAR – Thoughts for the week?
3) Brokerages – I like AMTD, EGRP – what about JBOH and NATS
4) Anyone have information/comparison on ADAP, PROX, WFII, and NTRO
5) Enjoy my amateur analysis of cnqr below!
Good Morning All:
I would like to contribute some information that I have gathered on cnqr. Specifically, I have used cmrc and arba as comparisons in order to attempt to determine what cnqr will do in the future.
First, current price to sales ratios are:
CNQR = 12.53
CMRC = 157
ARBA = 132
H&Q recently changed the projected revenues for cnqr for FY 00 from $72 mil to $52.99 mil. Since I do not know the projected revenues of cmrc and arba, we cannot compare the price to future sales ratios. This would be interesting though.
The three month stock price change:
CNQR = 5.2%
CMRC = 603.6%
ARBA = 55.5%
Total Float (according to Yahoo):
CNQR = 10.2 mil (22.7 mil outstanding)
CMRC = 3.3 mil (24.0mil outstanding)
ARBA = 5.0 mil (45.4 mil outstanding)
Obviously, this leaves cnqr the most to gain in the current frenzy of B2B commerce – the primary motivation of my study. Noting this, my study may be skewed even though I attempted to maintain an objective outlook.
Total Sales:
CNQR = $37 mil
CMRC = $17 mil for three quarters ( I couldn't find annual number – did not check SEC filings)
ARBA = $45 mil
So, why the drastic different in stock price?
CONCUR STUMBLED LAST QUARTER AND ANALYSTS DECREASED PROJECTIONS!
I will not go in to great depth, but this is important and I am sure there is someone here who could do better. Here it is: cnqr's product line has been changing over the past year. They have transitioned from “trying to sell a larger integrated suite of products as opposed to single applications” (from H&Q, 28 OCT 99). What I understand is that they are relying more on subscription based revenues than on license based revenues. Further what this does is decrease the immediate impact that a new product has, but it increases that products ability to produce a constant flow of revenues and a more stable growth rate once it becomes established. “The lower revenue projections are due to the fact that several of the items that impacted this quarter's results will likely spill over into subsequent quarters and the fact that the company plans to price its hosted products on a recurring subscription basis which will result in lower up-front payments.”
And the reason why this quarter was low: “The lower earnings result from the fact that Concur plans to increase investment spending related to (1) accelerating the introduction of and promoting new hosted versions of its suited of travel and entertainment expense management, travel, procurement and HR self-service applications and (2) creating an external commerce network a la Ariba and CommerceOne designed to link together buyers and suppliers.” There were also “delayed orders due to a combination of poor execution and company-specific factors.” This was a generic statement and I did not find specific details concerning the poor execution part of this sentence.
Can Concur Rally with CMRC and ARBA in the future? YES.
Near term: 2 Conferences this week – one tomorrow with H&Q and one on Wednesday with U.S. Bancorp Piper Jaffray Internet Conference. I believe we will see positive comments, possibly referring to one of three key events.
Listed in the order of least importance to most important.
1) Announcement of one or more major contracts
2) Introduction of eWorkplace.asp (which is different from eWorkplace.com which was just released)
3) The Grand-Daddy: the ecommerce network implementation
A few details:
1) More contracts equals more revenue which equals greater revenue projections which equals higher stock price. Further, client base is key here. This was dealt with before on this thread, so I will not go into detail here.
2) EWorkplace.com was introduced in October with over 25 large corporate customers. Eworkplace.asp will cater to larger Fortune 1000 companies that do not want to install and run their own software. This is scheduled to be released very soon.
3) The ecommerce network is scheduled to be operational by the end of the year. In my mind, this places concur in direct competition with ARBA and CMRC. And the key is that CNQR already has a client base of 2.1 million users!
Long Term: I feel that we will know in the next two months if cnqr can play with the big boys. However, I also think that will be too late. This stock could easily by tripled in no time IF, and only IF it shows the public that it means business in the ecommerce network.
Final Analysis: At this time, I feel that cnqr has an excellent chance of being viewed by the street as a real competitor in this market. And that is what it is all about – convincing Wall Street that this company will be a major player in the future of B2B. I think we will see the beginning of that this week.
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