Analyst Opinions :
1. Olde Discount Brokers:
Equity Research Note
Hyperion Solutions is weak today, we suspect, on concerns of meeting revenue estimates for Q2- FY 99 (ended
December).
We met with management last week. Although the business on whole is on track for the quarter, management indicated that the current quarter is somewhat more back-end loaded than normal. Although the technology sales, i.e., OLAP server (Arbor's offering) are robust, the application sales, i,e., budgeting, planning, consolidation apps
(Hyperion Software's offerings) are somewhat slow, indicating a lack of traction amongst the newly cross-trained sales forces. As a result, the visibility for the current quarter on the top line is somewhat diminished. The street estimates for revenue range from $117-118 million. We are projecting revenues of $116.7 million.
On the positive side, management is discovering more fat than anticipated, especially in Hyperion Software's European operations. As a result the expense savings will be better than previously estimated. Accounting for better rationalization of expenses, we are raising our EPS estimates to $0.31 for Q2 and Q3 from $0.29 and
$0.29 respectively. We are maintaining our revenue estimate.
Based on concerns about revenues, the stock will likely continue to be volatile until the numbers are reported in mid-January. The market demand for analytic applications remains high and we believe the company is well positioned to capitalize on it through its comprehensive application and technology solutions. Due to the merger however, it may take another quarter or so to completely synchronize the sales forces of the two companies to cross-sell and up-sell each others products. Possible concerns about competition from Microsoft and SAP in the near-term are not warranted, in our opinion
.
We maintain our BUY rating for aggressive, long-term investors.
Naveen Chaudhary
Corporate Headquarters • 751 Griswold Street • Detroit, Michigan 48226 • (313) 961-6666
2. Dain Rauscher Incorporated
HYPERION SOLUTIONS
NASDAQ: HYSL
BUY-AGGRESSIVE
PRICE TARGET: $45
December 9, 1998
Price: $29.00
52-Week Range: $53-$12
Year End: June
Fiscal Year EPS P/E
1998A $1.26 23.0x
1999E $1.64 17.7x
2000E $2.22 11.1x
Cal. Year EPS P/E
1997A $0.92 31.5x
1998E $1.44 20.1x
1999E $1.80 16.1x
Tr. 12 ROE: 8.4%
3-Yr. EPS Gr: 35%-40%
Shares Out: 30.8 million
Book Value: $6.97
Market Cap: $893.2 million
ENTERPRISE SOFTWARE
Marshall J. Leisten
Mleisten@dainrauscher.com
(650) 234-4166
¨ Hyperion is down today on rumors of a weaker-than-expected
second quarter and first quarter outlook.
¨ We spoke with CEO John Dillon on the source and rationale for
these rumors
¨ CFO has been on the road indicating greater caution on the
top line outlook for the quarter. This is not new news.
¨ We have already acknowledged the back end weighted quarter,
with the applications business less robust.
¨ We are still comfortable with our earnings estimate of $0.32
based on strong Essbase sales and upside potential on margins,
but there is added risk on top line revenues.
Note: There is more to this report, but I just could not cut and paste it to this thread. If anyopne wants the PDF file, PM me with your e-mail and I'll try to get it to you ASAP.
-Grabs |
