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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: Starlight who wrote (9325)	3/13/2001 2:17:55 PM
From: BZOOKA	Read Replies (1) \| Respond to of 10309

Jefferies just came out with an updated report on Wind and INSG They see the Wind River& Insignia deal as a blockbuster deal for Insignia and would be buyers of the stock at the current levels. Wind is considered the dominant player in the embedded world. Wind River posted 553 design wins last Q with revenue per design win over a $100,000. By choosing INSG's Jeode technology and making a strategic investment in the company, we believe it validates INSG and will open the door to new opportunities that were otherwise unavailable. It was recently estimated by an industry publication that Wind currently has a 36% market share in embedded systems with no competitor greater than 6%. The in-House market makes up about 58% and the trend toward outsourcing continues. Wind has become the de facto industry standard for Real Time operating systems with its VxWorks product. We believe the trend toward outsourcing will continue and Wind River(and now Insignia) will be primary beneficiaries. IDC projects revenue growth for embedded operating environment license sales to expand at a compound annual growth rate of 30% through 2004, while license unit shipments should grow even faster. Wind River's next generation platform expected later this year-Wind River's next-generation java-technology-based development platform should be ready by late 2001. We suspect INSG recognized some up front revenue from Wind in 4Q, will see modest revenue for 2001, and should see significant revenue flow for 2002. We don't see this as a quarter-by-quarter revenue or EPS story. This is a channel partner story. As INSG partners with key channel players it will get a disproportionate share of design wins and therefore revenue from them. We think the stock could be worth $13 based on a discounted cash flow analysis using a 10% terminal growth rate and a discount rate of 18%. Our $13 price target is 7.9x our 02 revenue estimate.