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

To: Benny Baga who wrote (13058)	1/10/2000 8:29:00 AM
From: CAPT TONY	Read Replies (2) \| Respond to of 20297

Here's another analyst's take on the Yahoo! relationship. I little different read <GGG> CHECKFREE: SHARE VOLATILITY DUE TO MISGUIDED YAHOO EXPECTATIONS 08:04am EST 10-Jan-00 J.P. Morgan (ARCHIBOLD, R. (1-212) 648-6231) CKFR January 10, 2000 J.P. MORGAN SECURITIES INC. - EQUITY RESEARCH RAIMUNDO C. ARCHIBOLD JR, CFA (1-212) 648-6231; archibold_raimundo@jpmorgan.com John Reilly Walsh, CFA (1-212) 648-8028; walsh_john@jpmorgan.com Tien-tsin Huang (1-212) 648-3191, huang_tientsin@jpmorgan.com CheckFree (BUY) SHARE VOLATILITY DUE TO MISGUIDED YAHOO EXPECTATIONS; REITERATE BUY AND $135 PRICE TARGET CKFR Earnings Per Share* P/E 52-Wk ------------------ ----- MkCap 1/7 Rge 6/98 06/99 06/00 2Q/00 2Q/99 06/99 06/00E Yld ($MM) ---- ----- ----- ----- ----- ----- ----- ---- ---- ---- ----- $89.63 $107-21 (0.05)A 0.04A (0.43)E (0.10)E 0.00A NM NM 0.0% $5,109 Calendar 52-Wk ------------------ ------------ MkCap 1/7 Rge 12/98 12/99 12/00 4Q/99 4Q/98 12/99E 12/00E Yld ($MM) ---- ----- ----- ----- ----- ----- ----- ---- ---- ---- ----- $89.63 $107-21 (0.25)A (0.16)E N/A (0.10)E 0.00A NM NM 0.0% $5,109 * Excludes nonrecurring items. Our reports and models are now available on the JPMS MorganWISE Website. Please contact your JPMS salesperson for more information. After watching CheckFree shares trade in a wide range between $70 and $90 last Friday based on market concerns (prompted by an analyst First Call note) about slower than "expected" subscriber growth at the Yahoo! (YHOO/$407.25/Buy) Bill Pay site, we will recap our expectations for CheckFree over the coming months. We remain very optimistic on CheckFree's ability to defend and extend its market leadership position in what we believe is a very large and attractive market. We believe the company has an unmatched distribution capability, a leadership position with billers and a technically superior offering, accordingly, we reiterate our Buy rating and $135 12-month price target on the shares of CheckFree. Yahoo! Agreement On September 8, 1999 CheckFree announced that Yahoo! had launched it Yahoo! Bill Pay offering. The offering was rolled-out on a limited basis and would be staged over time. From our checks at Yahoo!, a portion of Yahoo! Finance users were given the option to register for the service in the September launch. Over the next few months, Yahoo! provided a link to the service to all its registered users with a link on its home page by late October/early November. Based on this anticipated staged rollout, and the three-month free trial period offered to new users, our estimates only include only a modest increase in subscribers for the calendar fourth quarter. CheckFree is scheduled to report operating results on January 25th, and the company will also report "paid" subscriber growth. Therefore, only Yahoo! users that registered for the service from September 8th through September 30th and did not cancel after the end of the trial period will be included in the subscriber base. We estimate CheckFree will add approximately 220,000 new paying subscribers which will be offset by previously announced plans to parse approximately 200,000 accounts that are using non-Y2K compliant front-end software. We remain very optimistic that the Yahoo! partnership will be an important distribution channel for CheckFree going forward. On December 13th, Yahoo! announced it would begin offering electronic bill presentment via CheckFree which we believe will provide an additional catalyst for users to sign-up with Yahoo!. Upcoming Events CheckFree is scheduled to report results on January 25th after the market close with a conference call before the open on the 26th. Our revenue estimate is $70.9 million with an EPS loss of $(0.10). We also expect the company will announce the launch of the Excite@Home service within the next several months.