To all:
the recent weakness in the stock price seems pouzzling, to indicate the least. I have seen no negative news since last quarter's results to account for it. the last input I had is that while Live Web is not as yet producing substantial sales, there is hope for a pick up later in the year. also, Live Web has produced door openning opportunities that have benefited sales.
here is some data that might help put matters into perspective. this data is based on a market price of $8.75. the first number is IQ's ratio, the second is its peer group's average:
pr/earn 21.24/51.95; pr/sales 1.70/11.20; pr/book 1.83/14.85; pr/cash flow; 0.77/1.40.
with today's closing price, these numbers are, of course, now too low for IQ.
the mean estimates I have are $0.12 for QE 07/97; $0.17 for QE 10/97; $0.58 for YE 01/98; and $0.90 YE 01/99.
using a standard valuation method on forward earnings (the current fiscal year) would yield 35 (estimated growth rate--mean of two analysts) x $0.58 = $20.30. on the estimated earnings for the next fiscal year, that same valuation method would yield a projected stock price of $31.50 (35 X $.09).
additionally, consider that a May 1997 SEC filing DEF 14A, indicates that Messrs. Chas. Chitty and David Cormack were granted options with a strike price of $12.00. apparently, as recenlt as May the company did not consider $12,00 a share an unreasonable figure.
also, since last quarter, we have had the announcement of a partnering agreement with Remedy--a preimier player in the CIS market. we've had an indication from another poster that perhaps revenue is already beginning to flow from this deal.
IQ reported eps last quarter of $.09 compared to $0.13 last year. however, although I am relatively new to this company, I gather that the company was beginning to encounter problems last year resulting from a shift to a direct sales force from channel partners. it is obvious that there is a lag period in such a transition as a sales force must be trained. this results in costs for training before the sales force becomes productive. that is obvious. last quarter's results were a SEQUENTIAL increase of eight cents a share, an indication that perhaps the sales force is now becoming productive, thus justifying the excllent growth rate projections, as well as the estimated forward revenue and eps.
now having said all this, does anyone know of any reason why anyone should sell here other than panic? does anyone know of any reason why this weakness should not be considered a buying opportunity?
if you have any such input, please share it. I bought more shares today, and would like to increase to take advantage of what looks to be an absurd selloff coming off excellent results that met expectations.
thanks.
best regards. |
