What did analysts say:
About the value of the company:
Salomon Smith Barney analyst Ken McBride said that, "with no evidence of growth in the Electronic Design Automation (EDA) market, the stock would likely be stuck in a trading range in the high-teens to low-20s for two or more quarters."
BancBoston Robertson Stephens senior design automation analyst Jennifer M. Smith said "For the value accounts, we would encourage investors to look at the stock in the low- to mid-teens, as we do believe the demand for these electronic design automation tools is improving, and we would only remain cautious due to company-specific issues."
"The shares, in the best-case scenario, represent dead money for the rest of the year," said Deutsche Bank analyst analyst Steven Fortuna.
About the prospects for the future:
BancBoston Robertson Stephens senior design automation analyst Jennifer M. Smith said that the company needed to address several
company-specific issues:
1. further develop, deliver and communicate products within the context of design flow,
2. fix existing image issues with its customer base, and
3. reload backlog that the company seriously eroded last year to compensate for less than stellar services division performance
"As the accounting rules have become more stringent on revenue recognition, we believe that the company had little choice but to admit to lower expected growth in 1999 as it likely borrowed from 1999 growth to report 1998 results," Everen said.
Carl
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