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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: TWICK who wrote (74256)	12/4/1999 11:31:00 AM
From: kendall harmon	Respond to of 120523

BEAS--Cowen comments from November 17, another terrific analyst call <<Nov-17 99 SG Cowen Securities Inc. BEAS SYED, REHAN BEAS/BEST Q3 EVER; NEW PRODUCT CYCLE DRIVES HIGHER GUIDANCE/STRONG BUY Key Points: 1. Raised New $110 target reflects solid Q and rising valuation and incremental revenue from new products opportunity from acquisition 2. Best-ever Q3 report has strongest sequential revenue growth in 1.5 years 3. Top line upside is 11%; bottom line 2¢ ahead of consensus 4. New eSolutions revenue could be majority of revenue long-term 5. Acquisition is first move in what will likely become important market 6. Non-dilutive deal should drive considerable upside next year 7. Expect positive earnings report next week 8. Additional triggers include major event in early December 9. Aggressive new marketing campaign to expand investor interest 10. Valuation not cheap but could substantially outperform comparables Our raised $110 price target (vs. $100) is based on a sum of the parts valuation which ascribes comparable value to BEA's WebLogic product line as for other Internet pure plays like SilverStream, BroadVision and Vignette and minimal or zero value to the rest of its business. Note that since there is no revenue guidance yet on the e-business components product line, we have not included it yet in out valuation; i.e. we have room to move the target higher. On an aggregate basis, at $1010 it would trade at 145X 2000 revenue, which is still at a discount to players like ASWX, INFA, MSTR, TIBX, VITR who are more expensive even though, like BEAS, they are transition plays from the client/server to the Internet. Besides the Q3 report, other mMajor triggers include a major key strategy announcement on in early Dec. 6ember, a recently startedn upcoming aggressive marketing campaign and announcements of large customer wins. Recall that we upgraded the stock to a Buy in April based on a new relationship with HP which could drive upside to our estimates; this relationship is making good progress and could drive additional upside.>>