Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : CheckFree Holdings Corp. (CKFR), the next Dell, Intel? -- Ignore unavailable to you. Want to Upgrade?

To: Sam Biller who wrote (9626)	9/3/1999 5:30:00 PM
From: Sam Biller	Read Replies (1) \| Respond to of 20297

Did I beat Capt. Tony to this.... ** Hambrecht & Quist Hambrecht & Quist Hambrecht & Quist ** Company: CheckFree Corp. Price: 27 Recommendation: Buy Notes: a, f Date: 8/12/99 Strong FQ4 Results - Yahoo! Launch Imminent The company announced strong results as revenues of $70.8M and EPS of $0.05, after a net gain on the disposition of assets and one-time charges, beat our estimates of $66.5M and $0.04, respectively. Note that our est. were toward the low end of the Street range. EBP subscribers grew 6% from the prior quarter to nearly 3M, right in line with our est. CKFR signed an add'l 15 billers in FQ4 and 43 total in FY99, bringing total billers to 64 EOFY99. Yahoo! is currently in pilot testing and we believe an official launch is imminent. No change in FY00 estimates. Maintain BUY 1998 A 1999 E 2000 E Q1 EPS $(0.06)A $(0.05) $(0.10) Q2 EPS (0.02)A (0.00) (0.12) Q3 EPS 0.00 0.04 (0.10) Q4 EPS 0.03 0.05 (0.10) FY EPS (0.05) 0.04 (0.42) FY REVS (M) 234 250 308 CY EPS (0.05) 0.04 (0.42) CY P/E NM NM NM FY Ends Jun Current Price $26.44 52-Week Range $6-69 Market Cap(M) $1,502 Shares Out(M) 56.8 Book Value $3.29 Net Cash/Share $0.43 3-Year EPS Growth NM CY98 P/E-to-Growth NM Solid FQ4 Across All Business Units. The company announced strong results as revenues of $70.8 million and EPS of $0.05, after a net gain on the disposition of assets and one-time charges, beat our estimates of $66.5 million and $0.04, respectively. Note that our estimates were toward the low end of the Street range. Revenues were up 11% over the year-ago period, and up 19% net of the impact of acquisitions and divestitures. The Electronic Commerce division reported revenues of $46.5 million, compared to $38.9 million in FQ498. EBP subscribers grew 6% from the prior quarter to nearly 3 million, right in line with our expectation. The Investment Services division reported revenues of $12.3 million, representing 31% year-to-year growth after accounting for the Mobius acquisition. The number of portfolios under management increased 13% sequentially and more than 46% on an annual basis to end FQ4 at a total of 715,000. Software division revenues came in at $11.9 million, an increase of 5% over the year-ago period. The Company Continues Push to Bring Billers to Market with EBP Solutions. The company signed an additional 15 billers in FQ4 and 43 total in FY99, bringing total billers under contract to 64 at fiscal year-end. These 64 billers represent significant penetration in several key billing segments. Specifically, billers under contract represent 70% of U.S. telecom bills as compared to 56% of bills a year ago, 28% of credit card bills vs. 14%, 22% of mortgages vs. 8%, and 24% of targeted utilities vs. 7%. Of the 64 billers under contract, 29 are live with EBP solutions and an additional 21 are in the implementation process. The company brought 8 billers live during the quarter. The biller pipeline appears to be strong, and the company believes it can sign an additional 50 billers and have at least 90 live by the end of FY00. Preliminary data from the company indicate that measurable subscriber growth can be seen with only 1-2 bills available electronically as compared to the 3-4 bills the company had expected would be required to stimulate consumer interest. The company feels comfortable that it will be able to present subscribers in most US cities with at least 4 bills each month by the end of FY00. We continue to expect the Company will make concessions in terms of absorbing some of the additional costs to speed time- to-market. Further, we believe the EC Solutions division will not only allow the Company to keep up with demand, but also it will enable the Company to monazite a greater portion of its consulting and development work. The Company is Well-Positioned to Provide Distribution and Support Infrastructure. In total, 350 financial institutions and non-FI distribution points are under contract, and 34 are currently live with EBP. It appears that consumer demand for EBP is mushrooming - a Gartner group study has found that 88% of all US households surveyed (not just those already using the Internet) are interested in paying bills electronically. Hence, we expect that in the next 12-18 months, both the bank and Web channels will be very actively engaged in finding ways to participate in this burgeoning market. Note that the recently announced competitive consortium, Spectrum (originally The Exchange), is likely to enter the pilot testing phase this Fall. We continue to believe that a Y2K-related biller implementation moratorium beginning in October will prevent Spectrum from gaining any significant traction before April 2000. We reiterate that Checkfree is likely to have 90 billers live by June 2000, representing significant penetration in most major billing categories and multiple presentable bills per consumer in most geographic areas. Checkfree's pay-anyone capabilities and huge head start with respect to billers represent, in our view, significant competitive advantages. Yahoo! was officially announced as the portal partner today. Yahoo! is currently in pilot testing and we believe an official launch is imminent. We believe that the Yahoo! agreement will be a benchmark of the Company's ability to accelerate subscriber growth. We would not be surprised to see another major portal announcement by the end of 1999. We expect the company will continue to invest heavily over the next fiscal year to drive faster adoption of e-bill and presentment and to support infrastructure build-out. No Change in Estimates - Maintain BUY. Our estimates for FY00 remain unchanged at $308 million in revenues and EPS of $(0.42). We are projecting approximately 1.7 million new subscribers in FY00. Should the Yahoo! deal ramp faster than expected and/or an additional portal deal is signed, our numbers could prove conservative. 1999 Copyright Hambrecht & Quist LLC. All rights reserved. The information contained herein is based on sources believed to be reliable but is neither all-inclusive nor guaranteed by our firm. Opinions reflect our judgment at this time and are subject to change. We do not undertake to advise you of changes in our opinion or information. In the course of our regular business, we may be long or short in the securities mentioned and may make purchases and/or sales of them from time to time in the open market, as a market maker, or otherwise. In addition, we may perform or seek to perform investment banking services for the issuers of these securities. Most of the companies we follow are emerging and mid-size growth companies whose securities typically involve a higher degree of risk and more volatility than the securities of more established companies. For these and other reasons, the investments discussed or recommended in this report may be unsuitable for investors depending on their specific investment objectives and financial position. This report is not a recommendation or a solicitation that any particular investor should purchase or sell any particular security in any amount, or at all. on suitability considerations, please contact your account executive. RESEARCH NOTES: H&Q publishes brief Research Notes covering very recent or developing events or situations regarding companies or industries covered. These reports are made available to interested clients of H&Q on a request basis. They often contain only partial information in very brief, often in outline form; their purpose is to provide rapid information and preliminary evaluations of such events or situations which may very rapidly be changed as a result of subsequent additional information and analysis. Please contact your Note Legend: (a) Hambrecht & Quist LLC maintains a market in these stocks. (b) Hambrecht & Quist LLC has been an underwriting manager, or co-manager, or has privately placed securities of these companies within the last three years. (c) Hambrecht & Quist LLC has an investment position in these companies. (d) A Hambrecht & Quist LLC employee is a director of these firms. (e) The analysts covering these stocks have investment position. (f) Options are available on these issues. (g) Entities associated with Hambrecht & Quist LLC have an aggregate beneficial ownership of more than 5% of the outstanding equity securities of these companies. (h) Hambrecht & Quist acts as a financial advisor to this company. (r) Restricted. No recommendation at this time. May, but does not necessarily, designate company in registration.