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.

Strategies & Market Trends : Quarter to Quarter Aggressive Growth Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Jack Hartmann who wrote (686)	9/4/2000 12:25:05 AM
From: Jack Hartmann	Respond to of 6921

W) Quick and Loose on VITR Rated a WATCH A leading provider of eBusiness infrastructure software. Their product, BusinessWare, provides the infrastructure that enables incompatible information technology systems to exchange information over corporate networks and the Internet. 20-Jul-00 11:00 -- 12:00 ET Vitria Tech (VITR) 58 1/2 -1 1/2: CSFB reiterates STRONG BUY; ups price target to $80 from $60; after company reported another consecutive quarter of impressive results driven by revenue upside, margin expansion, and operating profitability. 19-Jul-00 AFTER THE CLOSE Vitria Tech (VITR) 60 -1 3/16: Reports Q2 earnings of $0.01 a share, $0.03 better than the First Call consensus of ($0.02); revenues rose 404.1% to $31.75 mln from a year-ago of $6.30 mln; see press release. 08-Jun-00 10:00 -- 11:00 ET Vitria Tech (VITR) 43 1/4 -1: CSFB reiterates STRONG BUY rating and price target of $60; VITR recently announced expansion of relationship with PricewaterhouseCoopers. 23-May-00 BEFORE THE OPEN Vitria Tech (VITR) 35 1/64: CSFB reiterates STRONG BUY rating and price target of $60. VITR will benefit from Darwin's theory in action - only companies that can provide truly comprehensive, value-added solutions will survive as stand-alone entities longer term. 05-May-00 12:00 -- 13:00 ET DigitalThink (DTHK) 27 7/8 -1 5/8: Thomas Weisel initiates coverage with a BUY. DigitalThink is a leader in the rapidly expanding B2B eLearning market and is undervalued relative to the other leading ebusiness enablers such as Ariba (ARBA), Commerce One (CMRC), and Vitria (VITR). 31-Mar-00 09:48 ET New Era of Networks (NEON) 42 13/16 +3 13/16: After seeing its stock cut in half on talk of competing IBM products and a possible missed quarter, NEON fights back today by preannouncing upside surprises on Q1 revenues and earnings. The company said that Q1 revenues will be in the $40-41 mln range relative to expectations of about $38 mln, and that earnings will be "somewhat better" than expectations. NEON is in the enterprise application integration (EAI) space; their software and services enable companies to integrate Internet facing applications with core operational systems to facilitate end-to-end automation such as order fulfillment. Its competitors in this space are a laundry list of hot momentum stocks: Active Software (ASWX), Mercator Software (MCTR), TIBCO (TIBX), and Vitria Technology (VITR). As the table below illustrates, NEON is very cheap relative to its peers. This low relative valuation traces back to a misstep last year, when it warned on July 6 that it would miss its second quarter numbers, and indeed revenues fell to $26.1 mln in Q2 from $29.1 mln in Q1. A sequential revenue decline would not be fatal for most old economy stocks, but steady, sequential growth and positive surprises are de rigueur for new economy stocks. NEON's stock was crushed. While it ultimately clawed its way back to a new record high of 96 1/4, it quickly imploded with the first hint of a possible missed quarter. That's the legacy of an earnings warning for a momentum stock -- it is tough to ever regain that momentum given the memories of the last implosion. If you ignore that one missed quarter in 1999, NEON looks much like its competitors -- a tremendously successful company operating in a hyper-growth sector. Its top-line growth is a bit slower, but that is because it is one of the more mature companies in this sector, and boasts higher revenues than the rest. TIBX is certainly comparable in terms of revenues and boasts a strong growth rate, but does it warrant a market cap of better than 12 times that of NEON? (Note that for consistency purposes, the table only includes calendar Q4 data, and that TIBX operates on a Nov quarter-end.) Because of its one miss, NEON's valuation does not even come close to its peers. With today's positive preannouncement, we see that NEON's strong business momentum continues and for long term investors who can stomach the occasional anxious moments that are a function of this company's past indiscretion, NEON certainly offers a more reasonably priced option in the EAI space. - GJ EPS (0.18) to (0.05) to (0.01) to 0.01 Jun00 per briefing Rev 6.3 to 7.8 to 12.2 to 20.5 to 31.8 Jun00 Chart: Collaped in April to $20, another dip in August to $33 and we got ourselves another symetrical traingle. Can break either way. 52-Week Low on 29-Sep-1999 $7.656 Recent Price $48.938 52-Week High on 28-Feb-2000 $106.00 Daily Volume (3-month avg) 1.14M Daily Volume (10-day avg) 1.14M Market Capitalization $6.24B Shares Outstanding 127.6M Float 54.9M Price/Book (mrq) 26.86 Price/Earnings N/A Price/Sales (ttm) 73.34 Debt/Equity (mrq) 0 Total Cash (mrq) $226.2M Short Interest As of 8-Aug-2000 Shares Short 628.0K Percent of Float 1.1% Summary Price to sales is very high. TIBX Price/Sales (ttm) 114.09 NEON Price/Sales (ttm) 7.92 ASWX Price/Sales (ttm) 21.17 IONA Price/Sales (ttm) 14.18 One misstep and the momo player will bail out like raoches fleeing a burning building. Too risky at present level. Need some more quarters to lower number. Good balance sheet though. Jack