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Technology Stocks : PTC
PTC 175.99+1.2%Nov 7 9:30 AM EST
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To: Box-By-The-Riviera™ who wrote (3050)1/4/2000 10:09:00 AM
From: Edwarda  Read Replies (2) of 3646
 
Let's try to be clear-headed here. Although the company didn't give us much to chew on, it's a fair bet that the shortfall emanates from large deal slippage (which we knew was a possibility), what may have been too much focus on Windchill, all the shifting around of the sales force, and maybe some Y2K effects--despite what the company told analysts on the conference call and at the meeting.

Obviously, although Windchill is exciting and marks the future of the company, Pro/E is the base business and, even using the projections form the conference call, will still represent two and a half times those of Windchill. The company has to pay more attention to its bread and butter simply to fund Windchill's potential. This is a fact.

Estimates have to come down for fiscal 2000, no doubt about it. Before the earnings release and conference call, it's difficult to put together a good model and come up with an estimate; but someplace between 70 cents and 80 cents looks likely. Although the stock looks messy until the company can really show that Pro/E has stabilized, an eventual target price of at least $25 looks achievable based on a multiple of 20 times Windchill revenues and 2.5 times Pro/E revenues. These are the multiples for similar businesses' stocks.
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