UP DATE UP GRADE. Regards p
INPRISE CORP UPDATE
REITERATE STRONG BUY
$15 12 MONTH TARGET PRICE; STARTING TO SHOW MOMENTUM
Inprise [NASDAQ: INPR--$7.75: STRONG BUY] is beginning
to show some
important sales and product momentum, we believe, with
a number of important
events coming up for the company over the next 6-8
weeks. In addition, the
stock has traded up about 75% from severely oversold
levels at the end of
December 2000. Inprise will announce its calendar
2000 year and 4th quarter
numbers on January 25th with a conference call during
market. We expect a
flattish sequential quarter, of about $48.5 million in
revenue, up
marginally from $47.56 in September. Earnings should
come in around $0.12
about flat with third quarter. The quarter will be
flat because Inprise is
just beginning its new product rollout and a mix shift
in revenue is ongoing
with the older products rolling off and the newer
products rolling into
revenue. It released JBuilder 4.0 for Java
development about 5 weeks ago,
and it is selling well, we believe. In addition, this
product has won an
award recently from PC magazine as one of the best
Java tools on the market.
We expect a steady flow of news and product releases
throughout the year,
beginning in late February/early March with the
release of Kylex, the
industry's first RAD tool for Linux application
development and deployment.
Kylex may be shown in final beta version at the late
January Linux trade
show in NY at the Javits center (we will organize a
little demo for
clients). The product has already won awards before
release for its
excellence, and Inprise has received over 20,000
orders from developers
eager to begin writing for the Linux market. This
type of activity prior to
release is highly unusual, we believe, and signifies
enormous interest
amongst the developer community in this tool. We
believe Linux hardware
(servers, predominately) has over 30% share of the
server market so far and
is rapidly gaining. The problem is there is no
software specifically
written for the Linux O/S and no tools with which to
compile code. Inprise
will have the market to itself. At $300 per copy,
selling to its installed
base of 3 million developers using its platform tools
for development and
deployment on Windows, NT, Java, MAC, etc., we think
this and follow on
products for Linux could be extremely significant.
Inprise is also the subject of the "Inside Wall
Street" column in this
week's Business Week.
Inprise also announced it signed a multimillion dollar
contract with
Norway's largest banking group in which it will use
Inprise/Borland tools to
build the core infrastructure of its internet banking
service serving over
100,000 customers DNB selected Borland Visibroker and
Gatekeeper to provide
infrastructure to its internet services and Borland
JBuilder to develop Java
applet clients for the banking application, which will
process over 20,000
transactions per hour. Inprise is targeting banking
and financial
institutions, especially in Europe.
In March, Borland will bring out a major upgrade to
its Delphi C++
development tool, the first such upgrade in 18 months.
Throughout the year
we expect more upgrades and new products to follow for
the current platforms
and new platforms, such as Linux. We also expect the
company to launch its
Developer Software Portal (DSP) in January and develop
several software
distribution, maintenance and collaboration revenue
streams there. By late
2001 we expect Borland to enter the wireless
application tool development
market with WAP tools to provide the intelligent
software for 3G handsets to
tie back to the enterprise in order to function as
mobile computers in
transmitting and receiving broadband communications
files.
Finally, we remind investors that Inprise will change
its name and ticker
back to Borland (brand equity) under the ticker "BORL"
on or about January
22, 2001.
REITERATE STRONG BUY $15 12 MONTH TARGET PRICE.
Freimark Blair & Company Small Cap Research
Audrey Snell - asnell@freimark.com
Chang Qiu - cqiu@freimark.com
Richard Farr - rfarr@freimark.com |
