Given my "play" on MCOM's potential future it seemed only nature to also look for the folk(s) providing the wireless modems. As such I've been nibbling on SWIR. Looks like maybe Lehman has too. This from a threadster over on RB:
Lehman report BUYYYYYYYYYYYY
May 31, 2000
Sierra Wireless (SWIR - $46942 ) 1 - Buy
Initiation of Coverage
Clear Leader in Wireless Modems; 1 Buy
EPS (FY 12/31)
- - - - - - % Change
Actual Old New St. Est. Old New St. Est. - - - -1Q
- - - -- - (0.09)A - -- - - -- - 0.01E - -- - - - - -2Q
- - - -- - (0.12)E - -- - - -- - 0.06E - -- - - - - -3Q
- - - -- - (0.11)E - -- - - -- - 0.11E - -- - - - - -4Q
- - - -- - 0.02E - -- - - -- - 0.14E - -- - - - 600
Year - - - -- - (0.30)E - -- - - -- - 0.32E - -- - - - - -
P/E - - 86.9
Market Data Financial Summary
Market Cap $0.4B Revenue FY - $34.8MM
Shares Outstanding 14.2MM Five-Year EPS CAGR 35.0
Float - - Return on Equity FY - (3,326.1)%
Dividend Yield - - Current BVPS 3.3/sh
Convertible No Debt To Capital 0.7%
52 wk Range 40 - 27 Disclosure(s) C
Stock Overview
Investment Conclusion
We are initiating coverage of Sierra Wireless with a 1
Buy rating. Sierra Wireless is a leader in the rapidly
growing market for wireless modems.
Summary
q Sierra Wireless is a pure play on wireless data. It
will benefit from the transition to next generation
wireless networks that will offer significantly higher
data rates.
q We believe that contracts with AT&T Wireless, Sprint
PCS, and Metricom, worth a combined $84 M,
position Sierra Wireless to significantly exceed our
revenue estimates of $34.8 M in 2000 and $80.1 M
in 2001. The company may be poised to expand its
roster of blue-chip customers with announcements
with additional wireless carriers and potentially
computer manufacturers.
q Our confidence in the outlook for Sierra Wireless is
based on the company?s leading product portfoliio,
its excellent revenue visibility, and leverage to the
upgrade cycle in wireless networks. Our price target
is $80, or 15-20x our 2001 revenue estimate.
Rating Target
New: 1 - Buy New: $80
Old: Not Rated Old: - -
United States
Technology
Wireless Equipment
Tim Luke
(212)526-4993
tluke@lehman.com
E Q U I T Y R E S E A R C H
SUMMARY AND VALUATION
We are initiating coverage of Sierra Wireless with a rating of 1 Buy. Our confidence in Sierra Wireless stems from its position as a leading beneficiary of two macro trends ? the increasing pervasiveness of the Internet and the growing demand for mobility. Sierra Wireless? primary product line, the AirCard, is a plug-in PC card wireless modem for portable computers that allows users to connect to the Internet and other data networks, such as corporate Intranets, over conventional wireless networks. Sierra?s
AirCard operates over the Cellular Digital Packet Data standard, which is widely available in wireless networks, including those of AT&T Wireless, Verizon, and others.
Sierra?s other product lines include OEM modules for computer manufacturers, rugged modems for use in harsh weather conditions, and telemetry devices. Our confidence in the outlook for Sierra Wireless is based on the company?s position as a major beneficiary of the migration to next generation wireless networks and the growth of wireless data. Today?s networks, including GSM, CDMA, and TDMA, offer data rates of 9.6 and 14.4 kbps. Over the next twelve to twenty-four months, wireless carriers such as AT&T Wireless, Sprint PCS, and Verizon will begin the transition from today?s 2G networks to 2.5G and 3G networks that match, then significantly exceed, the transmission speed available via today?s conventional dial-up networks.
John~
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