vincenzo,
I have been following this stock daily since it showed up on my radar screen. I have been patiently deciding whether or not to initiate a position. All the while, I continue to gather information and input, especially on what is keeping the price down. Sorry, I don't buy the conspiracy theory.
This is my take. First and foremost, the stock is grossly undervalued relative to its financials. However, there are concerns which are legitimate. Namely, Intel and especially ATI. I noticed that all of the new Dell notebooks are using the ATI Rage chip. Up until this most recent family, the were using Neo's 128 offering. Dell is big...but more importantly it could very well be the beginning of a trend. ATI is aggressively going after Neo's share and they have just started. They have the reputation, resources, and products to erode some of Neo's large market share. They also have the potential to ruin margins for all players while they gain share. I don't think anyone doubts Neo's short term prospects. They will at least meet this quarters targets (although I do think some people are overly optimistic with regards to huge upside surprises). Regardless, people are concerned with 6 months from now, 1 year from now, etc. Will ATI or other competitors take back share?? Neo has already experienced its sharp growth in market share....it's only natural to assume that growth will slow. That doesn't mean that they can't grow at a healthy pace, just not like in the past. WS doesn't like to see growth rates decline, even if they are still very respectable. Same with margins.
My guess is that they will beat estimates by a few cents but that they WILL caution that current growth rates are not sustainable. Again, this doesn't mean that growth can't be good and certainly that doesn't justify this ridiculous valuation....but I think you know how WS looks at cautious forward looking statements. If they are cautious going forward....it won't matter even if this quarter is a blowout.
Still watching and still deciding.
Good luck to all longs,
FF |
