Analysts comments on competition (taken from a recent article)
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Competition will build, of course, but analysts believe that Infospace's technology and relationships are solid enough to keep it in the lead. No competitor can offer everything that Infospace does. About 350,000 wireless phone customers have signed up for Infospace services via cellular carriers says Vik Mehta, research analyst at Goldman Sachs. One advantage is that "their technology is proprietary, and Infospace is layering services on top of its existing ones, while its competition is trying to develop the basic package."While competitors play catchup, Infospace is busy developing a strong worldwide brand. "It's like Intel Inside, but for the Internet," says PaineWebber's Preissler.
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No only do the analysts think INSP will prosper, but they feel they are in the lead (pretty obvious) and will remain in the lead. Who's right, the analysts or spytrdr? Or, is it somewhere inbetween? INSP says they could have $1 to $3 billion in revenue per month and spytrdr says they will be out of business. Let's say spytrdr is closer than INSP. Let's say that they only have 10% of the middle revenue range suggested by INSP. That would be $200 million per month or $2.4 billion per year. Use net margins of 20% (darn low) and you get net earnings of $480 million. Use a PE of 50 and you get a market cap of $24 billion just from the wireless segment of INSP's business alone.
Who's right, spytrdr or INSP? Both opinions are at opposite extremes. But, if INSP revenues simply come in at 10% of their bullish estimates an investment in INSP could easily increase 200% over the next few years.
These are only my opinions and extrapolations of the current market trend, but they make sense to me and to the analysts. I've yet to hear an actual arguments from the bears that is even worthy of consideration. I implore the bears to please find some reason that today's market cap isn't a value when you look at the future potential of this company.
Dave |
