HMQT: Wind Reports Strong Q3. Raising Revenue Estimates, Price Target to $60.
(First Call 11/19 07:44:20)
07:42am EST 19-Nov-99 Hambrecht & Quist (Matt Belkin) WIND INTC LU LBRT INTC.GW
**** Hambrecht & Quist **** Hambrecht & Quist **** Hambrecht & Quist ****
Company: Wind River Systems
Price: 35
Recommendation: Buy
Notes: a, b,f
Analyst: Matt Belkin 415-439-3585
Date: 11/18/99
Wind Reports Strong Q3. Raising Revenue Estimates, Price Target to $60.
* Wind reported a strong Q3. Revenues of $44.6 mil easily beat our $41.9 mil
estimate.
* Earnings were in line with our 17" expectation as Wind continues to invest
in the post-PC opportunity.
* Wind continues to gain momentum in the embedded market, as evidenced by
several strategic agreements announced during the quarter including Intel and
Lucent, as well as Liberate's announcement that Cable and Wireless will begin
to deploy its set-top box technology.
* We continue to believe Wind represents an excellent play on the whole
Internet appliance and Internet infrastructure opportunity and expect more
agreements of a similar nature in the near future.
* As a true provider of Internet-enablement technology, we believe Wind is
capable of achieving a valuation similar to that of its target markets and are
raising our price target to $60, or 13x times our new sales estimate of $205
million, up from $190.
* A conference call is scheduled for tomorrow morning at 8am PST, after which
we will issue a full report.
1999 A 2000 E 2001 E
Q1 EPS $0.10 $0.10a $
Q2 EPS 0.13 0.14a
Q3 EPS 0.16 0.17a
Q4 EPS 0.19 0.20
FY EPS 0.58 0.61 0.75
FY REVS (M) 131.9 166.7 205.0
CY EPS 0.61 0.75 --
CY P/E 57 46 --
FY Ends Jan Current Price $35
52-Week Range $11-35 Market Cap (M) $1539.6
Shares Out (M) 43.99 Book Value $3.99
Net Cash/Share $1.68 3-Year EPS Growth 35%
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