Genesys Telecommunications (GCTI) Message Board

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Technology Stocks : Genesys Telecommunications (GCTI)

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To: Wizard who wrote (162)	1/14/1999 10:55:00 AM
From: Wizard	Read Replies (1) of 220

Management didn't let the sell-side raise estimates despite the $.02 upside. The estimate for 3/99 is flat with 12/98 at $.17. That looks very unlikely unless the bottom falls out of their business. They should be able to do $.18 with no margin expansion and margins have expanded the last 4 quarters. Ori, the new CEO, must be just keeping numbers beatable as he learned from his SCOP days (SCOP blew a quarter and the stock tanked). There is a new supply of shares from the management team that left so the market has to absorb those. The stock looks too cheap to sell given the disparity with GEOC and the upside to estimates. GEOC has a valuation 40% above GCTI although GCTI holds its own and even replaced GEOC at one customer site. Moreover, GCTI is well over twice GEOC size in terms of revenues. Estimates for CY1999 (for GCTI) are about $.81 and the stock is at $26 = 32x. GEOC has a $.39 estimate (that is clearly too low) and its stock is $34 = 87x. Assuming a 10-15% revision up gets you to about $.45+ yielding a P/E of north of 70x. I hope GEOC has a good quarter as this discrepancy looks ridiculous and GEOC is a short if it doesn't beat estimates handily.

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