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To: gladman who wrote (108303)	9/12/2000 9:42:32 AM
From: H James Morris	Respond to of 164685

Isn't Free Market the original b2b grand daddy? Here's what DLJ thinks and Fmkt is up 17 points since this report. FREEMARKETS, INC. (FMKT: $55.5)+ 7/25/00 Another Excellent Quarter Earnings Per Share Old New P/E Ratios (FY:Dec) 2001E $(1.25) $(1.21) NA 2000E (1.53) (1.43) NA 1999A (0.70) NA Rating: BUY Change: None 12-Mo. Target: $125 For FY2000, we are increasing our revenue estimates from $62.6 million to $78.6 million and from $117 million to $144.9 million for FY01. We are decreasing loss per share estimates from $(1.53) to $(1.43) for FY00 and from $(1.25) to $(1.21) for FY01 as a result of higher revenue estimates, some of which we expect to fall to the bottom line. FMKT delivered very strong 2Q results with revenue of $19.4 million (+ 79.3% q/q, +363% y/y) that came in 43.5% ahead of our $13.5 million estimate. FMKT's operating EPS of ($0.34) handily exceeded our consensus-matching estimate of ($0.41). Gross margin in the second quarter of 43.4% came in 140 basis points ahead of our 42% estimate and last quarter's 41.4%. Reiterate Buy rating. FreeMarkets should be a core Internet holding* . Our new 6-12 month price target of $125 reflects the increased volatility of the stock, in light of the "industry exchange" competitive overhang on many B2B companies. While we think this overhang eventually lifts, it is likely to "cap" the expected return on FMKT over the next 12 months at 2x-3x.