Hi, Kevin -- In response to the press release by GMGC, Dain Rauscher has cut 2001 revenue expectations and reduced the near-term rating on the stock to Neutral (as noted on RB) given delays in VA rollout and pending resolution of financing and new-business-development issues.
However, the analyst remains very positive about the company's future prospects. He believes that the continued ramp-up of OnStar business and the diversification/expansion of the customer base will turn the company profitable in 2002 (he's estimating $0.09 per share for 2002 versus an estimated loss of $0.15 in 2001).
He expects the addition of new service offerings in 2001 and the rapid ramp of the subscriber base to catalyze accelerating telematics growth in 2002. And he continues to believe that companies positioned to capitalize on the "explosive growth potential" of the telematics market will enjoy strong revenue and earnings growth in the long term.
So as usual, this remains a situation fraught with short-term uncertainties but compelling long-term potential. I'm not trying to sugar-coat anything and Lord knows I've been wrong before, but it would seem that there could be huge upside in the stock from here (assuming some reasonable workout of the above-mentioned issues) following the current period of tax-loss selling, window-dressing and downright capitulation by fed-up investors (with whom I truly sympathize).
The biggest risk now seems to be financing, but somehow I think this gets resolved sufficiently to permit on-going operations until new business/revenues kick in. Dain estimates that the company should have at least as much cash on hand at year-end 2000 than they had at 9/30/00, which sound about right given the recent stock sales. So for better or worse, I for one am continuing to average down . . . I continue to think (hope) that my odds for eventually hitting it big with GMGC are as good or better than most other stocks I know of, especially given its current price level, although I'll admit that there are plenty of other very interesting stocks out there now given the recent Nasdaq carnage.
Best wishes for continued success to all the helpful posters on this Board, and I hope the New Year treats us all well.
ea |
