Just read the Black & Co report where Demon Yousah or some such person upgraded TMSR from a Buy to a Strong Buy. This was on May 3, when TMSR was at 20 1/2, so kudos to him (?) because it subsequently hit what, 26? They have a short term price target of $30.
For Q2, they estimate revenues of $6.2M vs $4.1, and a loss of eleven cents vs a loss of 65 cents. Q3 estimates revs of $7.1M vs $4.2M, with a loss of only a nickel vs a loss of 75 cents. The comfortably far-off Q4 is where things really get going, with revs of $21.5M vs $11.3M, and a profit of 31 cents vs a loss of 38 cents.
1999 revs estimated to be $43M vs $25.9M; earnings $0.10 vs ($2.07).
Margins are of course predicted to rise with every quarter, getting close to 30% by Q4, presumably as WeCanTalk products take up a larger and larger share of the total picture.
The even more comfortably far-off year of 2000 has revs estimated at $60M and earnings of $0.50. (Don't know how they figured a divisor for that, as number of shares by end of 2000 is IMO quite unpredictable...)
The report talks about the potential sale of the hardware division. They estimate that the software part could earn $1.00 per share in 2000. If the reader at this point performs subtraction, he can assume then that they imagine the hardware business to lose $0.50 per share in 2000...
Nowhere in the report does it say anything about sales to date in the WeCanTalk "portfolio" of products. I don't know how they can publish a research report with a straight face without discussing it! The product's been out there since January...
But one of the main points supporting their increased rating is "Building the Internet community," a term which they don't really define, but mysteriously suggest it will result in WeCanTalk creating a barrier to entry. You'll have to excuse me here for ROFLMAO for a few moments.
From a short's perspective, Q2 results should be interesting. I was quite surprised by the revenues they managed in Q1, so they might surprise again in Q2. The meagre $4.1M of last year should not be hard to beat. But it's obvious that TalkNPlay isn't selling, so no matter what the revenues turn out to be, margins are not likely to be as optimistic as projected, and that might cause them to recalc for the rest of the year. With the internet products not selling, and the hardware division projected to lose money the whole year, it's pretty obvious that the rosy fourth quarter won't come to pass, and Q2 margins will be a very interesting predictor of things to come. I think Q2 margins are estimated to be 26.5%, up from 21.6% in Q1.
According to Multex, analysts average estimate for 1999 earnings is $0.39, with the highest estimate being $0.77! Unfortunately, they don't name who that is.
It is just incredible that Black & Co do not talk about the past five month's sales of TalkNPlay, or indicate in any way that those sales could be indicative of future sales of the closely related additional products. It's just bizarre...
-- Pete |
