Some background re INSP and Blodget:
Message 15237808
7 MONTHS LATER: What "guidance" are these folks giving TODAY, and on what basis.....
Merrill Lynch - Henry Blodget....
Wedbush Morgan - Scott P. Sutherland
S G Cowan - John Graves
Thanks for the link...These articles disappear, so I'm printing it here for future use....
Toronto, ONT, July 18, 2000 /SHfn/
-- InfoSpace [INSP] has some heavy hitters on its side.
America Online [AOL] and Microsoft [MSFT] are important customers.
Merrill Lynch [MER] Internet analyst Henry Blodget believes that InfoSpace has the "best technology for wireless Internet." Other analysts are bullish on the company as well, and their optimistic targets are supported by technical analysis that projects a substantially higher price for the stock.
InfoSpace established itself by providing web customers with the national yellow pages and white pages directories. Its content has grown to include maps, classified ads, news, stock quotes, music and television listings. The company's commerce and promotion technology turns wireless phones into true commerce devices. CEO Aurn Sarin says InfoSpace has geared up to take a large share of the $3.7 trillion U.S. mobile commerce transactions market.
InfoSpace's wireless service has been adopted in 80% of the U.S. market. Seven of the top nine wireless carriers in the United States are InfoSpace clients. InfoSpace has content rights from more than 65 third-party sources. Its affiliate network consists of more than 3,000 websites, including AOL, Microsoft, Disney's [DIS] Go Network, NBC's Snap, DoubleClick [DCLK], Dow Jones' [DJ] Wall Street Journal Interactive Edition, and ABC LocalNet, among others.
Analyst Scott P. Sutherland is calling for $240 over the next 12 months, which would represent a 385% gain from Monday's close of $49-7/16.
From the user's perspective, InfoSpace's technology provides seamless information. People will be able to manage their lives from their cell phone, pager, television or PC. INSP lets a wireless user plug in a UPC code, price search the code and then click once to purchase. InfoSpace enables merchants to target groups of wireless users, and pay to run a promotion to such an audience. Some of its customers pay InfoSpace for the use of its content, and in other cases the merchants pay the wireless carrier and then InfoSpace shares in that revenue.
At its current price, the stock is trading at approximately 43 times projected FY2001 revenue of $205 million. The company is expected to be profitable in Q2 FY2001.
First Call estimates FY2001 earnings to be $0.06 a share. SG Cowan analyst John Graves believes that the company will continue to surprise, with strong quarterly earnings' growth supporting the stock price. First-quarter revenue for FY2000 totaled $19 million, up from $5.3million for Q4 FY1999. The results reflected increased traffic to affiliate networks. Q2 FY 2000 earnings are scheduled for release July 27.
Analysts are bullish on InfoSpace. Graves has a price target of $150 per share, and Wedbush Morgan Securities analyst Scott P. Sutherland is calling for $240 over the next 12 months, which would represent a 385% gain from Monday's close of $49-7/16. These targets are supported by the technical analysis that follows.
According to International Data Corporation, there are currently only 560,000 wireless Internet subscribers in the U.S. However, by 2003, there are expected to be 73.1 million subscribers.
Technically, InfoSpace has been consolidating in the $40 to $70 range for the past three months, after sliding from a high of $138-1/2. A measurement of the recent consolidation pattern suggests the stock will head to the $150 level in the near term. The stock has turned up from the oversold Bollinger band level. The fast stochastic has also turned positive from its deeply oversold condition. The stock is poised to continue its advance from current levels. InfoSpace stock successfully tested the $40 level, forming a triple bottom. From current levels the stock's potential appreciation far outweighs any downside risk. The stock will encounter first resistance in the $60 range, and further resistance at approximately $80, before continuing its advance to higher levels. Longer term, the stock has formed a significant base in the $15 range from January 1999 to November 1999. Projecting the base into the future would put the stock in the $240 range.
Cowan's Graves believes that the pressure on Internet commerce stocks has been unwarranted. He believes investors have paid too much attention to U.S. adoption rates, which have never driven the cellular marketplace. In Japan, where cellular penetration is close to 50%, the adoption of mobile services is tremendous. Graves believes that investors should take a cue from the Japanese rate. According to International Data Corporation, there are currently only 560,000 wireless Internet subscribers in the U.S., as opposed to the 3.8 million in Japan. However, by 2003, there are expected to be 73.1 million wireless Internet subscribers in the U.S., which will exceed Japan, which is expected to have only 40.9 million wireless Internet subscribers in that year.
InfoSpace's superior mobile commerce technology should continue to fuel large gains in revenue and earnings. Targets of $240 and share price growth of 380% are well supported by technical and fundamental analysis. |
