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Technology Stocks : Viador (VIAD) - Enterprise Portal -- Ignore unavailable to you. Want to Upgrade?

To: Carl R. who wrote (216)9/19/2000 12:47:05 AM
From: Walter Morton  Read Replies (1) | Respond to of 294
 
So, what affect do you think the Plumtree IPO will have on VIAD's stock price and volume?



To: Carl R. who wrote (216)11/3/2000 4:59:54 AM
From: Carl R.  Read Replies (2) | Respond to of 294
 
Updated comparison of three portal vendors:

Sales by Quarter:
        3-99    6-99   9-99   12-99   3-00   6-00  9-00
VIAD     1.2     2.1    2.7     4.2    5.3    7.4   8.4
PLUM      .2      .5     .7     1.9    3.9    4.9   8.7
SQSW     1.1     1.0    2.9     3.4    4.0    4.3   5.3

R&D by Quarter:
VIAD             1.1    1.6    2.4     2.9    3.0   2.8
PLUM              .3     .5     .5      .8    1.1   2.7
SQSW              .5    1.0    1.6     1.8    1.5   2.2

Sales & Marketing by Quarter:
VIAD             2.4    2.9    4.0     6.3    7.2   7.0
PLUM             1.2    1.6    2.0     2.3    4.3   6.7
SQSW             1.2    2.1    2.6     3.7    5.2   5.1

Daily Sales Outstanding (a measure of AR)
         6-00  9-00
VIAD      110    81
PLUM      136    94 
SQSW      129   157

Deferred Revenue (a hint at future revenue)
VIAD      3.9   4.7 
PLUM      3.2   8.5
SQSW       .7   1.0

NOTE: I adjusted VIAD R&D to account for the R&D expenses that they capitalized

Observations:
1. PLUM has just passed VIAD to become the biggest of the three, while SQSW is dead in the water.
2. VIAD's growth in R&D spending and marketing is clearly being hurt by the limited cash resources. PLUM is growing these expenses rapidly and will pass VIAD in the December quarter. VIAD's failure to raise additional money last spring has cost them dearly. They need to be spending aggressively here on R&D and marketing or they will risk losing market dominance to PLUM.
3. SQSW continues to look like a train wreck about to happen. They are reporting sales, but customers aren't paying for them (AR is growing rapidly), and they aren't booking any deferred revenue, so future sales growth could be a problem.
4. As I predicted, PLUM was a sure bet to post great numbers in in Q3. They also posted huge growth in deferred revenue. At this point they appear to be in the drivers seat, while VIAD is still trying to be the primary challenger. I have no doubt that PLUM will be a tough competitor.

After the IPO, PLUM will have a market cap 10x that of VIAD. If VIAD can regain lost momentum, they could have some room to appreciate substantially. They are forecast by analysts to have sales of $10.1 million this quarter, but I think that they will need more like $12.5 million to keep up with PLUM.

VIAD clearly needs to take action to line up additional financing, and then resume growth in both R&D spending and marketing or risk being left behind by the market.

Carl


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