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To: Dealer who wrote (25916)	7/19/2000 8:26:50 AM
From: Dealer	Respond to of 35685

SEBL--Siebel Is One of a Few Firms Worth 25 Times Sales By Todd P. Bernier Siebel Systems (Nasdaq: SEBL - news) is racing away from the competition in the customer-relationship management (CRM) space in which its competes, a market segment that is projected to grow about 40% annually for the next three years. Although its shares are richly priced and could lose some of their luster in a broader market sell-off, Siebel is a stellar long-term choice for technology investors. Siebel continues to sign high-profile customers and blow past Wall Street estimates. It reported yet another outstanding financial quarter after the market close Tuesday. Revenues for the June quarter more than doubled from the prior-year period and improved about 25% from the March quarter. Even more impressive, deferred revenues--cash received but not yet booked as revenue--grew to $159 million, up about 5% from last quarter. Once again, revenues were very evenly split between existing and new customers, indicating that demand for Siebel's software remains robust. Including the results of recently acquired OpenSite, which added only $3 million to Siebel's top line, earnings per share of $0.22 handily surpassed consensus estimates by $0.04. Although net income was slightly overstated by the inclusion of the partial sale of USinternetworking (Nasdaq: USIX - news) shares, Siebel would have beat expectations even without those gains. Although a price/earnings multiple of more than 200 times projected 2000 earnings is difficult to justify, investors need to take into account Siebel's incredible growth rates. If the company can continue to grow earnings by more than 100% annually for the next several years--which appears possible--Siebel's stock may not be as egregiously overvalued as it first appears. Siebel's P/E multiple relative to its growth rate--often referred to as the PEG ratio--of 2 is comparable to those of other technology bellwether firms. The company is clearly delivering on its strong potential, and a bet on Siebel could eventually pay off big for highly risk-tolerant investors. Todd P. Bernier can be reached at todd_bernier@morningstar.com. Visit www.morningstar.com daily for in-depth analysis of stocks, funds, and sectors in the news.