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

To: TLindt who wrote (10370)	9/20/1999 2:13:00 PM
From: CAPT TONY	Read Replies (1) \| Respond to of 20297

For those keeping track: (CKFR)Raising Twelve Month Price Target to $56 from $40 01:13pm EDT 20-Sep-99 Volpe Brown Whelan & Co. (Wayne Johnson 415-274-4482) Volpe Brown Whelan & Company CheckFree Holdings Corp. September 20, 1999 CKFR -- $41 5/8 Meeting Wayne Johnson 415-274-4482 wayne.johnson@vbwco.com EPS 1999A 2000E 2001E Investment Opinion BUY Q1 $(0.03) $(0.10) $0.00 Price Target $56 Q2 $0.21 $(0.10) $0.00 52-Wk Price Range $69 1/8-$5 3/4 Q3 $0.03 $(0.10) $0.00 Shares Out. (million) 51.7 Q4 $0.02 $(0.08) $0.00 Market Cap. (million) $2151.6 Year(Jun) $0.23 $(0.38) $0.00 3-Year EPS Growth Rate 0% First Call ___________________________________________________________________________ _____ Raising Twelve Month Price Target to $56 from $40 -Calendarizing electronic banking revenue for 2000 lends support for a higher price target -We are applying a average electronic banking revenue multiple of 13x calendar 1999 revenue to next year -Yahoo! and other portals could provide upside to our street low subscriber estimates -High quality systems and customer service major competitive advantage -CheckFree is the dominate player in electronic banking and should increase its lead next year We are raising our twelve month price target to $56 from $40 on CheckFree and reiterating our BUY rating. The basis for the higher valuation is focused on a calendarized year 2000 electronic banking revenue estimate of $200 million, to which we apply a 13 forward multiple for a $50 per share price on this segment alone ($200 million x 13 = $2.6 billion/52 million shares=$50 per share). We value CheckFree's non electronic commerce divisions, banking software and investment services, together at $6 per share. Previously, we had used a fiscal year (June) 2000 sales projection of $170 million, all we have done is apply the same methodology to calendar year 2000 electronic banking revenue estimate of $200 million. We are using a 13 forward revenue multiple for the electronic banking division which is the Internet banking average for 1999 and does not factor in a premium for the market leader. Furthermore, we have not made any adjustments to our street low 4 million subscriber projection for F2000 which could be revised upwards if the Internet portal agreement with Yahoo! takes off and we think there is upward potential from any Lycos, AOL or Excite announcement. We believe CheckFree is a franchise in the making. ___________________________________________________________________________ _____ Additional information is available on request. ___________________________________________________________________________ _____ The information in this report is based on sources we believe to be reliable but there is no guarantee that it is complete or accurate. It is not to be deemed an offer or solicitation on our part with respect to sale or purchase of any securities. The opinions expressed reflect the judgment of the author(s) at this date and are subject to change. VBW&Co, its partners, and/or employees may be long or short securities described and may make purchases or sales of them from time to time while this report is in circulation. Should you have any specific investment questions, please contact your VBW&Co registered representative. Date of previous comment: 08/12/99 Volpe Brown Whelan & Company. Member SIPC. ¸ 1999 First Call Corporation, a Thomson Financial company. All rights reserved. 888.558.2500 END OF NOTE