CheckFree Holdings Corp. (CKFR), the next Dell, Intel? Message Board

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Technology Stocks : CheckFree Holdings Corp. (CKFR), the next Dell, Intel?

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To: TLindt who wrote (4209)	4/2/1999 7:56:00 PM
From: Erik T	Read Replies (1) of 20297

Someone please point-out my ignorance because this seems too good to be true. From the fiscal 1998 annual report: Revenue from E-commerce increased $ 52 mil in 1998 EBP subscribers increased from 1.7 mil to 2.4 mil (700,000) Most new subscribers were added in first two quarters with a slowdown in final two quarters. Assume 250,000 new in first quarter 200,000 new in second quarter 150,000 new in third quarter 100,000 new in fourth quarter --------------------------------- 700,000 total new subscribers Because only the first quarter subscribers were a source of revenue for the entire year, this number of new subscribers is equivalent to 500,000 subscribers on board for an entire year. $ 52 mil increase in revenues / 500,000 subscribers = $ 104 per new subscriber per year PK talked about efficiencies that could drive margins of 50% That equates to a gross profit of $ 52 per new subscriber After the company is up-and-running and profitable over the next couple of years and must start paying taxes at 39% rate... this equates to a net after-tax profit of $ 31.72 per year for each new subscriber. Under this arrangement the company earns about $ 1/share for each 1.67 million new subscribers. With Genesis scalable to about 42 mil households, if they can fill it up, that comes to .....$ 25/share in after-tax net profit. Pick your own P-E and time frame to bring in all that new business to determine how high and fast this stock will move. For now CKFR earns revenue from implementation fee, monthly fee and a per transaction fee. I have heard talk of moving to a transaction fee only in the future. Any idea of how payments for E-Bill services would be structured through the portals or AOL? Just some Friday afternoon musings. Erik

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