So here's how they're going to pop it: the old get another analyst trick. Now that Blodgett is hedging his recommendations by uttering the words "pro forma," HOMS has found an analyst who isn't . . .
>>MENLO PARK, Calif., Aug 6, 2001 /PRNewswire via COMTEX/ -- U.S. Bancorp Piper Jaffray Senior Internet, Media and Marketing Analyst Safa Rashtchy today initiated coverage of Homestore.com (Nasdaq: HOMS-$27.65 chart, msgs, # chart, msgs) with a Buy rating and a 12-month price target of $45, based on 75 times his fully taxed calendar 2002 earnings-per-share estimate of $0.60. Homestore.com Inc. is the leading supplier of online media and technology solutions to the home and real estate industry. Through its family of Web sites, the company offers consumers everything for their home including the largest online source of homes for sales, as well as rental, new construction and other home related services.
"Homestore is by far the No. 1 network for home and real estate on the Web, attracting nearly eight million monthly unique visitors (nearly two times its nearest competitor), reaching over 57 percent of visitors to real estate web sites and featuring 368,000 subscribers among real estate professionals," said Rashtchy. "Homestore.com operates in a market segment (real estate) that has demonstrated very strong online migration, positioning the company to automate the industry through hosted applications and to drive qualified leads and capture advertising revenue."
In his report, Rashtchy states that Homestore.com features diversified revenue streams, with an approximate 60/40 split between subscription and advertising revenue. Recurring subscription revenue increases visibility and unlike other Internet companies, the company earns virtually no revenue from dot-coms and has solid advertisement revenue growth.
"We expect strong growth over the next several quarters from 1. Continued migration of real estate functions online, 2. Up-selling, cross-selling and increasing prices of subscription services and 3. Continued strong advertising revenues," said Rashtchy. "We believe Homestore has a highly profitable and sustainable business model in a growing market. Although execution and expansion of this model are not without risks, especially given various partnerships and arrangements the company maintains. We believe Homestore will be able to sustain the expected growth rates in the next four to six quarters."
U.S. Bancorp Piper Jaffray, a subsidiary of Minneapolis-based U.S. Bancorp (NYSE: USB chart, msgs), provides a full range of investment products and services to businesses, institutions and individuals. The company's investment banking business has grown exponentially in the last several years by focusing on the needs of growth companies in the health care, technology, financial institutions, consumer and industrial growth sectors. U.S. Bancorp Piper Jaffray has a national reputation for its expertise in fundamental research and equity and debt financing. U.S. Bancorp offers a comprehensive range of financial solutions through U.S. Bank, U.S. Bancorp Piper Jaffray Asset Management, U.S. Bancorp Libra Investments and U.S. Bancorp Piper Jaffray. Securities products and services offered through U.S. Bancorp Piper Jaffray, Inc., member SIPC and NYSE, Inc., a subsidiary of U.S. Bancorp.
Some or all of the following hedges may apply. (#) U.S. Bancorp Piper Jaffray, Inc., makes a market in the company's securities. (~) An U.S. Bancorp Piper Jaffray, Inc., officer, director or other employee is a director and/or officer of the company. (@) Within the past three years, U.S. Bancorp Piper Jaffray, Inc., was managing underwriter of an offering of, or dealer manager of a tender offer for, the company's securities of an affiliate. Additional information is available upon request. Not FDIC Insured. No Bank Guarantee. May lose value.<<
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The ATM line forms to the right. I must say though, that reaction is muted. Could it be some members of the investing public have seen this before? Reckon it'll challenge $30 anyhow, where I have another round of calls waiting to be sold. BTW, in scanning the last few months 144s, I am struck that virtually all of them are for $32 or more. This is where I'd sell a lot of calls.
Cheers, Tuck |
