TO ALL - A MUST READ
On the news wires today I saw ASND Analyst meeting notes from
9 firms - 8 of which were not posted. No links available and way too
much data to type. They do give some insight into why the stock is
acting the way it is. The firms are: Merrill Lynch, Goldman Sachs,
Everen Securities, DLJ, UBS, Bear Stearns, Morgan Stanley, Cowen,
and J. P. Morgan.
Assuming the analyst's for these firms were all at the same meeting and
heard the same ASND presentation, it's amazing how different they are,
and the thoroughness and accuracy for some leaves much to be desired.
Much bias and even some outright lies are stated by some.
There are definitely different axes to grind here.
I'll try to synopsize - everything refers to ASND, not the industry:
I hope this formats well - I cut and pasted from WORD due to length.
This took me all night to do so I hope the thread appreciates and comments on this:
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Merrill Lynch: Very bullish
Reasonably accurate and thorough analysis.
General comments:
"Positive outlook going forward."
Revised Financial Model:
Mentioned ASND revised their financial model and increased operating
margin from mid-high 20s to high 20s. SG&A decline significantly.
Near term Revenue Outlook:
Mentioned "optimistic about Sep qtr" and "no slowing in sight".
Long term Revenue outlook:
No mention.
PSI(net) relationship>
Mentioned 40,000 ports for ASND to 1,000 for COMS(USRX)
Cascade Frame Relay and ATM Sequential Growth:
Mentioned "double-digit" for FR and "even stronger" for ATM
GRF Sales:
No mention.
Europe/Japan/Other International:
Mentioned "comfortable" with Europe outlook in the 2nd half 1997.
No mention of Japan or other
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Goldman Sachs: Moderately bullish
General comments:
"Continue to recommend purchase." "Well positioned to benefit from the construction of the world-wide wide area data networking infrastructure."
Revised Financial Model:
No mention.
Near term Revenue Outlook:
Mentioned "management did not temper near-term guidence
issued following 2nd qtr results" as some investors had feared.
Long term Revenue outlook:
Mentioned "company was confident"
PSI(net) relationship>
Mentioned ASND remains primary supplier despite PSI's decision to support a limited number of X2 ports. States "We continue to believe the co may lose some market on the margin as some of ASND's other ISP customers deploy limited amounts of X2".
Cascade Frame Relay and ATM Sequential Growth:
Mentioned " could show double-digit sequential growth for both FR and ATM". Belief that "Carrier spending should accellerate in 2nd half.
GRF Sales:
"Continues to make progress" Sales about $45M in 1997. ASND believes it is gaining share from CISCO.
Europe/Japan/Other International:
Mentioned Europe outlook in the 2nd half 1997 expected to be strong, but difficult to quantify. No mention of Japan or other
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Bear Stearns: - "Maintain neutral rating "
- Very negative, incomplete and misleading analysis.
General comments:
"Very positive ASND presentation" which "created euphoria in the stock". ASND's rise yesterday was "overdone". Believe competitive issues "still haunt" the company. "Lost two important customers - PSINET and Telefonica).
Revised Financial Model:
No mention.
Near term Revenue Outlook:
No mention.
Long tern Revenue outlook:
No mention.
PSI(net) relationship>
Mentioned "Lost PSInet" as a customer.
An outright lie as ASND issued a press release the same day announcing a major deployment of TNT.
Cascade Frame Relay and ATM Sequential Growth:
Mentioned "strong growth and backlog growing".
GRF Sales:
No mention.
Europe/Japan/Other International:
Mentioned Cascade "opportunities" in Europe .
No mention of Japan or other
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UBS Securities: Moderately bullish - maintain hold
Generally a thorough and accurate report
General comments:
Expanded relationship with Nortel to one of "joint R&D".
Revised Financial Model:
No mention.
Near term Revenue Outlook:
Company is "on track" for 3Q. Still some "overhanging concerns (Europe uncertainty, increased competition in RAS)".
Long tern Revenue outlook:
"Positive".
PSI(net) relationship:
No mention.
Cascade Frame Relay and ATM Sequential Growth:
Estimate 7% sequential growth - 10% may be "achievable".
U.S. market expected to "only modestly grow" in 1998. Increased competition in FR/ATM.
GRF Sales:
ASND indicated 50 companies are evaluating GRF. Sales have not tracked as expected. ASND expects strong 2nd half. Est $12m-15m in 3Q.
Europe/Japan/Other International:
Mentioned Europe remains backend loaded. Bidding on several RFPs for data networks with "new carriers" that should occur over the next year.
Japan outlook particularly good - renewed purchasing from NTT of Japan, plus "some new wins". No mention of other
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Cowen & Co.: Moderately negative - Neutral
Generally a lazy, misleading and incomplete report
General comments:
"Positive tone".
Revised Financial Model:
No mention.
Near term Revenue Outlook:
ASND "painted a picture of next 2 qtrs". (didn't say what it was!)
Long tern Revenue outlook:
"Slowing long-term demand for concentrator ports".
PSI(net) relationship:
No mention.
Cascade Frame Relay and ATM Sequential Growth:
"Appears to track", "Better backlog".
GRF Sales:
No mention.
Europe/Japan/Other International:
Mentioned Europe "pending better visibility". No mention of Japan or other.
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Everen Securities: - Bullish -reiterate 1-1 rating
Generally a thorough and accurate report
General comments:
"several positives increase our confidence in the company's ability to combine the 2 cos, exploit new opportunities and continue to exceed industry average revenue growth.
Revised Financial Model:
No mention.
Near term Revenue Outlook:
Backlog for 56K is strong. ISP market to pick up in 2nd half.
Long term Revenue outlook:
Continued demand for remote access. Telcos continue to invest
Pickup in WAN switching.
PSI(net) relationship:
No mention.
Cascade Frame Relay and ATM Sequential Growth:
By slowing down Cascade's growth in the 1st half, ASND could increase backlog, enabling "more linear" quarters and better managed costs.
GRF Sales:
No mention.
Europe/Japan/Other International:
"International opportunities remain strong". Could derive 50% or rev by 4Q. ASND optimistic about increasing Cascade's international contribution. No mention of other
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DLJ: - Bearish - no change in BUY recommendation
Generally a biased and incomplete report.
General comments:
"Some of our assumptions are too aggressive".
"Trimming estimates following analyst presentation.
"All TNT chassis are now shipping".
2nd generation RAS under development
Revised Financial Model:
No mention.
Near term Revenue Outlook:
Lowering EPS from 0.39 to 0.36.
Long term Revenue outlook:
Lowering EPS from $2.00 to $1.85".
PSI(net) relationship:
No mention.
Cascade Frame Relay and ATM Sequential Growth:
No mention.
GRF Sales:
No mention.
Europe/Japan/Other International:
No mention.
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Morgan Stanley\DW: - Bullish -maintain strong buy.
Generally a no information report.
General comments:
"ASND shares were up $6.25 yesterday following the company's very bullish presentation.
Revised Financial Model:
No mention.
Near term Revenue Outlook:
$1.37 for 1997.
Long tern Revenue outlook:
$1.95 for 1998.
PSI(net) relationship:
No mention.
Cascade Frame Relay and ATM Sequential Growth:
No mention.
GRF Sales:
No mention.
Europe/Japan/Other International:
No mention.
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J.P. Morgan: - Bullish -reiterate Buy rating
Generally an accurate report
General comments:
ASND shares represent an excellent buying opportunity.
Revised Financial Model:
No mention.
Near term Revenue Outlook:
Company is moving "full speed ahead" after a difficult 2nd qtr.
Long tern Revenue outlook:
No mention.
PSI(net) relationship:
PSInet is standardizing on Ascend's MAX TNT line and is only using COMS Total Control for specific customers.
Cascade Frame Relay and ATM Sequential Growth:
ASND expects "double-digit" sequential growth in both products.
Cascade slowed it's growth in the first half to build backlog.
GRF Sales:
No mention.
Europe/Japan/Other International:
Europe should be strong for ASND in second half. Almost all European carriers are ASND customers.
Stronger international sales (especially Japan) for Cascade.". No mention of other |
