IMRS A Y2K FIRM SUCCESSFULLY REPOSITIONING ITSELF Message Board

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Technology Stocks : IMRS A Y2K FIRM SUCCESSFULLY REPOSITIONING ITSELF

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To: paul e thomas who wrote (69)	2/16/1999 10:33:00 PM
From: Wizard	Read Replies (2) of 188

IMRS is executing very well but what can you say, IT services is an ugly neighborhood no matter how nice the house. CHRZ is a piece of crap but IMRS gets lumped with it by otherwise reasonably intelligent people like Ed Caso at Alex Brown. Ed lowered his 12/98 eps estimate 2 weeks ago to $.19 and to $.82 for 1999. Nice job Ed, try $.21 and $1.00. IT services is a world where too many crappy companies were able to go public and beat estimates by taking advantage of the y2k services bubble. It is almost comical that so many management teams were so short-sighted as to take on so much business that was not sustainable. Then at the first time that companies are actually forced to execute their way throgh a transition printed on everybody's calendar, company after company has to lower their forecast. Meanwhile, IMRS is chugging along putting up numbers which force analysts to raise estimates over and over again. IMRS deserves a premium valuation over other IT services companies but (almost) everybody else is lowering their forecast while their stocks fall so the average multiple is now about 10-15x 2000 estimates. KEA made its number and full-year 1999 estimates were maintained but its 15x multiple indicates just what investors think of this group. IMRS is likely to do north of $1.30 in 2000 even as y2k goes to a very small percentage of revenues. I think the stock goes up near-term and then fades as investors refuse to look into this ugly neighborhood. If Ed Caso as an industry 'expert' refuses to distinguish between crap like CHRZ and IMRS, how do we expect portfolio managers to do it? Longer-term, the non-y2k business deserves a good multiple and this should be the dominant portion of revenues in Q499 and in 2000. Its just a matter of dead-money until the y2k-transition is over and people decide to look at IMRS's sustainable business model of 40% growth and margins equal to or better than their y2k biz.

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