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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year
PSFT 0.00010000.0%Oct 29 5:00 PM EST
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To: mt who wrote (3797)12/2/1998 11:51:00 AM
From: Chuzzlewit  Read Replies (3) of 4509
 
I know you didn't address the question to me, but let me jump in. First, the negatives are that in connection with its last earnings report management sharply decreased its forecasted growth after issuing a rather rosy picture a month or so before. On top of that, the percentage of revenues derived from licenses fell sharply. Worse than that, deferred revenues actually dropped this quarter. Michelle Harris, who regularly inhabits this thread, contends that the market for larger S&P100-type customers may well be saturated and the opportunities exist now in smaller type businesses. Finally, management repriced its stock options which I view as management's attempt to pick share holder pockets.

Now the positives: Management decreased its growth estimates to 25%-35% (not bad by any standard other than PeopleSoft's) based on the uncertainty of the marketplace -- not a visible decrease in demand. In other words, the decreased forecast was a conservative reaction to uncertainty. I think that the market for smaller companies, government agencies, universities and colleges is huge. I think that the major constraint may be Y2K budgeting limitations. If that's true we may well see a dramatic pickup in sales in the latter half of 1999 or the first quarter of 2000.

Hope this helps.

TTFN,
CTC
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