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 : Optimal Robotics Corp. (OPMR) -- Ignore unavailable to you. Want to Upgrade?

To: J_W who wrote (206)	6/5/2000 1:24:00 PM
From: Obewon	Read Replies (2) \| Respond to of 325

New report issued: Reiterate Strong Buy Fri Jun 02 09:07:07 2000 (FIRST CALL) CRES: OPMR: Channel and Management Checks Encouraging; Reiterat CRES: OPMR: Channel and Management Checks Encouraging; Reiterate Strong Buy (1) 09:07am EDT 2-Jun-00 Pacific Crest Securities (Allison Hamilton (800) 314-983) Pacific Crest Securities 111 SW Fifth Ave. 42nd Floor Portland, OR 97204 Optimal Robotics Corporation (OPMR - $34 3/8) June 2, 2000 Allison Hamilton, 800-314-9837, ahamilton@pacific-crest.com Spoke with Management and Conducted Channel Checks; Quarter Shaping Up Well Rating: Strong Buy (1) Changes: None Price: $34.38 52-Week Range $9-$49 FY End: Dec. FY 2000 Price Tgt $65 Shares Out (Mil) 13.9 EPS 1999A 2000E 2001E Market Cap (Mil) $477.8 Mar ($0.08) $0.06A --- Avg Daily Vol (1000s) 1100 Jun $0.04 $0.10 --- Book Value $5.25 Sep $0.11 $0.12 --- Dividend Nil Dec ($0.03) $0.03 --- 3-5 Yr EPS Growth 50%-70% FY $.05* $0.29 $0.92 P/E 800x 118.5x 37.3x FY 2000E EPS - Street: 0.31 FY 2001E EPS - Street: 0.90 Rev (mils) 1999A 2000E 2001E Mar $5.1 $12.0 --- CY 2000E Rev/Mult: 3.3x Jun $7.2 $15.7 --- CY 2001E Rev/Mult: 2.6x Sep $10.6 $19.8 --- Dec $6.8 $11.3 --- Qtr End Jun 30, 2000 FY $29.6 $58.9 $90.2 Est Rep Date Jul 25, 2000 * 1999 results do not reflect a one-time $3.5M tax benefit and a one-time $600K inventory write down. Reported EPS was $0.35 for FY 1999. Key Points -- Spoke with management, quarter is on track. We're projecting EPS of $0.10 vs. $0.04, and 155 U-Scan installations. We are very comfortable with our numbers. -- Company mentioned it will be introducing its self-checkout stations at a trade show in London this month. -- Also said it is moving forward with banner advertising on its touchscreen monitors. Will provide more detail on the conf. call in July. -- Also spoke with a large OPMR grocery customer and it said the company is very pleased with OPMR's U-Scan Express. -- The customer said it will expand roll-out of U-Scan Express very rapidly, will go in all new stores and remodels or roughly 50-100 stores per year. -- The customer said the main benefit of U-Scan systems is labor flexibility. For instance, for late night shifts a store could close down all check stands and leave one U-Scan open, pay one cashier and have the equivalent of four lanes. Late night orders tend to be smaller, ideal for self-checkout. Also said it addresses labor shortages in some markets and improves customer service by providing more efficient option. -- The customer also said that from what it has seen of competitor's products, OPMR's U-Scan is the best, "the real deal". -- Shares have pulled back recently from 43x our 2001 EPS estimate to 37x our 2001 EPS estimate providing an attractive entry price. --- We are very optimistic about OPMR's expansion opportunities and positive feedback we are hearing from its customers. We are expecting a solid quarter with possible upside to our U-Scan installation projection. We would be buyers at this level. Investment Conclusion At roughly 43x 2001 our EPS estimates and almost 6x our 2001 revenue estimates OPMR's valuation may seem a little lofty. However, we are projecting EPS to grow at a CAGR in excess of 70% over the next 3-5 years. We looked at several companies in OPMR's public peer group (technology/consumer goods) and found that the group on average is trading roughly in-line with its projected growth rate. Given its strong visibility, market leadership position and the opportunity to penetrate new markets, we believe OPMR can trade in line with is growth rate and are setting a 12-month price target of $65 or 70x our 2001 EPS estimate of $0.92. We would look for several positive catalysts over the next year such as upside earnings surprises, new customer announcements and market expansion to boost the stock higher and rate the shares a Strong Buy (1) with a $65 price target. Obewon/Valuation Guy