Charles (and anyone else who cares to comment), I may have asked this on here or at the Manu thread, nobody bothered to offer a guess. What is the factor that will produce the revenue "cap" on the growth of these company's revenues. ie., boiling it down to, how many companies are in position to truly benefit from the product that don't already have such algorithms in process? The revenue increase of this software company (and Manugistics) makes it clear they are in the midst of a rapid expansion, at some point it will approach a limit, through either saturation, competition, or inability of the company to service the product.
Case in point is Cymer, which came public and immediately went into a full-scale ramp-up of production of its laser, throughout a yaer the growth was limited only by its ability to grow. However there are only so many fabs, and only so many converting to the avante-garde, so demand is currently satisfied and the stock corrected to reflect that. When I asked about this aspect while gasping at the stock price rise I was roundly booed by the shark-hounds on the Cymer thread.
Similar situations in many IPOs which appear to have "tremendous" growth but are simply expanding into a vacuum from no capitalization to a real product with waiting customers.
I notice in Itwo that despite the rapid revenue increase, net margins are still quite small. Is there such a high service cost to the software, or is this going to R&D?
As for RMDY,ITWO, Manu I don't know much beyond the buzzwords attached. I still don't know what "help desk" software is, but supply-chain management sounds much more profitable. Also have you uncovered anything queer about the accounting suggesting possible shakedown such as the case of Pega systems, which was recognizing revenue well in advance of delivery (or something fishy like that). When Pega first made a significant drop I charted its stated financials and they looked like dynamite. They have been restated since, of course.
Greg |
