From Briefing.com (8/29/2000 14:30 ET ******)
Wind River Systems (WIND) 39 7/8 -3/16: WIND is one to watch ahead of Thursday's earnings release scheduled for after market close. WIND has a history of trading up ahead of their quarterly reports and selling off afterwards. Not that the news is ever cause for selling, the company has consistently beat Street expectations, and we expect more of the same Thursday. First Call and Zacks have EPS estimates of $0.07 for the quarter, expect WIND to beat that number by a couple pennies. Revenues should come in around $100 mln, with product revenue comprising 70% of the total and service revenues accounting for the remainder. Although WIND is gaining a following on the Street, there still seems to be a lack of enthusiasm or more likekly, understanding regarding the story. A few smaller brokerages follow WIND and some biggies, like Prudential, have recently started coverage. Of seven firms, four have STRONG BUYS and three have BUY ratings on the stock, so the analysts that do know the story like what they hear. WIND makes operating system software for embedded applications. You may have heard of the "Post-PC era" that some Street analysts have dubbed our immediate future, referring to growth opportunities "above" the PC level (servers, network appliances, etc.) and "below" the PC level (cellular phones, PDAs, etc.). The latter level, "below" the PC is where the opportunities lie for WIND. The company just announced the acquisition of privately held Norwegian company, ICESoft, which makes embedded Internet browser application software. The deal strengthens their presence in consumer appliances as well as gives them an increased presence in the European consumer market which is welcoming the movement to data exchange via wireless appliances more rapidly than here in the US. An even more significant announcement came last week when Sony (SNE) announced that WIND's O/S will be, "a highly visible part of its portable Internet music strategy." WIND also was just named to the S&P Mid-Cap 400 Index. WR Hambrecht recently issued a note estimating that approximately one-half of current embedded systems use homegrown (in-house) solutions. Because in-house solutions are expensive to develop, WIND has the technical expertise and a time-to-market advantage as an outsourced provider, and significant growth opportunies lie in WIND's ability to displace homegrown solutions. We like the WIND story long-term and would not be surprised to see Thursday's earnings release present a trading opportunity as well. - Matt Gould, Briefing.com |
