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Noah, build me an ark
CNBC sez...ptc now at $15 1/8 on instinet in am pre market trading, just before the market opens.
Laura Cunning-one at Goldman just revised her ptc numbers, but she didn't take ptc off the Goldman recommended list. Here's why, first the numbers:
for FY 98 to 0.75
FY 99 to 1.10
trailing FY 97 at 0.82
Mark Haines, CNBC resident curmudgeon*, suspects (but couldn't confirm) that Goldman does investment banking for PMTC, and this implies that Goldman's posture toward ptc would be inherently biased and so would at best give only mild hints of problems if they were to surface, even if they knew things in greater detail. Thus, the $8 million revenue decrease was clearly the strongest hint she could have given until the company came out and confirmed their problems. Since the Goldman analyst's revenue decrease triggered such a strong reaction, it is clear that the funds involved in PMTC knew how to interpret Laura's "Cunning" call.
so Laura Cunning is now telling the market that ptc will have gone from 35% eps growth mode to negative numbers for 98. So much for a protective backlog.
...and if you go from 97 to 99 the annualized growth rate would be: 15.8% (sq root of 1.10/.82)
guess the p/e will reflect this now.
and a p/e based on the Goldman analyst's this year's 0.75 eps call (if the stock trades at $16): 21.3...a value buyer's play...NOT.
PTC would have to trade down to $12 to have a FY 98 based p/e of 16.
But the bigger issue is one of confidence the street has in a company and their management team.
SDRC went thru this "losing of Wall Street's confidence" scenerio in 1994. In fact Laura C was the most burned analyst from that event. So you can see why she hates SDRC and now will learn to hate PMTC. Maybe she should start covering another sector (either that or get treatment at a burn unit). When SDRC mishandled things in 1994, they had to change the entire management team and the new folks have had to work their asses off the regain a semblence of wall street credibility...which, even to this day is limited. The SDRC ship was fixed and is sailing a strong and more conservative course now. Since they went into enterprise PDM over 2 years ago, that's a substantial head start. PMTC's conf call confirmed that SDRC had the correct strategy of moving into the PDM markets and sdrc is far ahead with working product (Metaphase) that they can showcase courtesy of Ford's Worldwide Enterprise...vaporware it's not. Enterprise PDM is a situation where long term relationships are key. Still there was a buying opportunity in 1994 that occurred for long termers...SDRC was a $5 stock back then, but it took courage to be a buyer in the face of such an ugly situation. I suspect that there are similarities that are occurring with pmtc but there will be great pain for current ptc shareholders. That is if you trust their current management team. Hmmm.
Cubster
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* cur/mud/geon (noun)
[origin unknown]
First appeared 1577
1 archaic : MISER
2 : a crusty, ill-tempered, and usu. old man
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