PSFT - Fiscal 1998 - Discussion for the next year Message Board

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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year

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Oct 29 5:00 PM EST

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To: Tom Gebing who wrote (3463)	11/4/1998 8:26:00 AM
From: Tom Gebing	Read Replies (1) of 4509

CREDIT SUISSE FIRST BOSTON CORPORATION Equity Research November 3, 1998 PeopleSoft (PSFT, $23.25, HOLD) Target (12 Months): N/A PSFT's annual user conference provided another opportunity to second-guess Q3. While we got some more insight into the surprise, the picture was still vague. Aggressive competition from SAP (SAP, $43 7/16, HOLD) on the administrative financial and HR applications seems to be the thread most likely to endure for the near-term. Presentations for the industry business units seemed more upbeat than expected, given CY99 guidance. Though the debate over investment levels is not over, the company can meet commitments to products already announced with its current development organization. The new services strategy aims to lower the lifecycle costs for customers - and to help in competitive evaluations. Customers appear to have been demanding more PSFT consultants because of dissatisfaction with partner quality. The ship dates for the analytic applications were reconfirmed for Q1 and Q4. But the biggest splash of the day was reserved for the E- Business strategy announcement. Though not a material revenue producer in '99, it represents a leap in usability, functionality, and potential penetration within customer organizations. Despite the bruises, PSFT showed themselves to be a very strong #2. But we still need to see one or more of the industry business units kick- in as a locomotive for growth before we can recommend an upgrade. So we maintain our Hold rating Annual EPS 12/99E $0.6812/98E $0.62

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