So INSP was guiding 2002 at 310 million revenues as of last quarter, Bear Stearns had them at $167-$172 million for 2002 and INSP comes in with 105 to 110 million for 2002 in this Q3 01 cc.
Stearns report reads:
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Current guidance for 2002
indicates a range of revenues of $105-$110 million, down from previous
guidance of $167-172 million and down from the previous quarters guidance of
$310 million for 2002. This is indeed a worrying trend as the company shows no
signs as yet of credibly stabilizing the business
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Also Stearns notes that either INSP is 'Giving away their services' (my words not theirs) or is actively attempting to lowball figures in order to report strong upside surprises in 2002.
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from the report.
Given the growth profiles of both the
merchant services and wireless businesses, we can only assume that this growth
going forward is a result of continued pricing pressures in the information
syndication business and/or that the company is working to build in an upside
surprise in the future after delivering so many disappointments.
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Summery for me is that, Although I am happy I sold my position. I am encouraged by INSP gaining market share in such a difficult market as we have today. It does not bother me that they continue to increase their footprint, even if it means less revenues or some such deals.
Is INSP that cold and calculating enough to guide down so severely simply to gain some spotlight later when they trounce earnings and get related favorable press? Is this the mentality of this company? It will surely harm some of the shareholders now. Is this really a marketing strategy? Again I wonder if they are pushing the price down actively.
Or are they making that final reorganization with the cut of 200 employees, instead of empire building, INSP is turning into a tight little niche market enterprise that runs on very little overhead, and takes on only the most profitable parts of the business model? It asks a lot of investors to hold while they chop off another large piece of future revenues.
Wall Street is interested in this companies incubation yes. The timeframe for birth? Who really knows. Bear Stearns goes as far as to say this may be a candidate for tax loss selling as this stock may not go anywhere.
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From the report
Given that the
company has approximately $1 per share in cash, no debt and a small quarterly
burn of under $10 million, we think that it will pay to be patient in this
name. However, while we believe in the long term story for the shares, we
would point out that we do not expect them to appreciate significantly any time
soon and should an investor need a tax loss sale candidate, this name would
apply.
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