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Technology Stocks : DSS: DLT finally open for trading -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (108)	10/15/1999 10:10:00 AM
From: Robert Douglas	Read Replies (2) \| Respond to of 488

Here's what Bear Stearns said this morning about the earnings. Key Points Quantum DSS reported 2QOO EPS of $0.34, in line with our forecast of $0.34 (also the First Call average). Revenues grew 23% Y/Y to $357 million as the company saw good momentum in royalty revenue and storage systems offset by less robust growth in stand-alone DLT drives. We are maintaining our recently reduced FYOO estimate of $1.35 and FYOI estimate of $1.55. As we have said before, we are a little more anxious given that the company's record of missing quarters and these estimates could be susceptible to future revisions. Despite the inconsistency in DSSs financial performance, we are maintaining our Attractive rating on DSS owing to our belief that the company is well-positioned with (1) the growth of the data from Internet activities such as e-commerce, e-mail, and richer multimedia that needs to be backed-up and protected, (2) DSS's leading market position with its DLT products with over 80% midrange server market share, (3) our anticipation of a strong product upgrade cycle with SuperDLT next year. Our price target on DSS remains at $23-$25. We reach our $23-$25 target by assigning a multiple of 15x-16x against our fiscal 2001 (ending March) estimate of $1.55. Although this multiple may be at a discount to that of its peers, we are taking a conservative stance given the company's recent earnings shortfalls and the performance issues associated with tracking stocks. Q1 Jun Q2 Sep Q3 Dec Q4 Mar Year 1999 0.29A 0.33A 0.35A 0.35A 1.28A 2000 0.30A 0.34A 0.34E 0.36E 1.35E Previous0.30A 0.34E 0.34E 0.38E 1.35E 2001 0.32E 0.36E 0.41 E 0.46E 1.55E Previous0.32E 0.34E 0.42E 0.47E 1.55E