Persistence Software (from Internet Analyst)
A Dogged Determination to Reward Investors
By Timothy Middleton and Michael Middleton
PERSISTENCE SOFTWARE (PRSW) has persisted in disappointing investors, but one Wall Street wag thinks patience is about to pay off.
The shares of the San Mateo, Calif.-based developer of tools for Web-based commerce are trading at a discount to their rivals, but Mark A. Verbeck, an analyst with U.S. Bancorp Piper Jaffray, predicted that the gap will close. He recently upgraded PERSISTENCE SOFTWARE to BUY - AGGRESSIVE from NEUTRAL.
The company develops software for online transactions for the finance, telecommunications and manufacturing industries. CISCO SYSTEMS (CSCO) and Instinet, both investors in PERSISTENCE SOFTWARE, account for approximately 30% of the company's sales. Through direct sales and the use of distributors, the company has a presence in North America, Latin America, Asia and Europe.
One key factor is the company's recent acquisition of 10BaseJ, the creator of a Java engine that will be incorporated into the newest release of the company's flagship product, PowerTier 6.0. This, said the analyst, "will deliver one-stop shopping for e-commerce platform customers. We believe that this product extension will improve PERSISTENCE SOFTWARE'S competitive position."
Mr. Verbeck said the company's current quarter is running ahead of estimates. But 4Q99 was disappointing, with revenue of $4.7 million only slightly ahead of his $4.5 million forecast and losses of $0.19 a share exceeding his estimate of $0.17. The company is investing heavily in development, and Mr. Verbeck increased his 2000 estimate to a loss of $0.93 a share, from $0.58. He also has a 12-month price target of $24 to $28.
Vital Statistics
Persistence Software
(PRSW)
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Recent Stock Price: $20 (3/17/700)
Market Cap: $368.96M
Shares Outstanding: 18.44M
52-week High: $30.50
52-week Low: $8.18
EPS:
1998: ($0.28)
1999: ($0.66)
2000E: ($0.96)
Revenue:
1998: $10.2M
1999: $14.4M
2000E: $22.1M |
