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Technology Stocks : MindSpring Enterprises (MSPG) Another ISP. -- Ignore unavailable to you. Want to Upgrade?

To: Tom Klempay who wrote (351)	7/23/1998 9:33:00 PM
From: ct	Read Replies (1) \| Respond to of 1434

briefing.com 11:55 ET ****** ISPs: Internet Service Providers can make money. It wasn't long ago that technology pundits were questioning the earnings viability of these companies, particularly after the trend toward flat-fee pricing began to permeate the industry. But as MindSpring Enterprises (MSPG 150 1/8 +9 13/16) demonstrated in its latest earnings report and as America Online (AOL) has shown for over a year, profits are indeed attainable. After the close, Atlanta, GA-based MindSpring reported net income of $0.24 a share, exceeding the First Call mean estimate of 8 analysts surveyed by 6 cents or 33% and reversing a year-ago loss of $0.19 a share. Revenue increased 116% to $11.6 million. While Herndon, Va.-based PSINet (PSIX 18 13/16 +2 7/8) has not yet climbed into the black, both investors and Wall Street analysts are very enthusiastic about the company's prospects. Investors have expressed their confidence by bidding the stock up 44% since Tuesday, after the company reported a Q2 loss of $0.67 a share, 2 cents narrower than the First Call mean estimate and a year-ago loss of $0.69. Revenues rose 82% to $53.7 mln. Following the report, DLJ started coverage of stock with a "Top Pick" rating, dubbing PSINet the largest pure-play Internet company in the world. The firm also views PSIX as a very attractive takeover candidate. DLJ's $25 price target suggests price appreciation potential of 33%. Last week, Pasadena, CA-based EarthLink Network (ELNK 44 1/4 +3/16) reported a Q2 loss of $0.39 a share, much narrower than the $0.55 a share loss projected by analysts. ING Barings Furman Selz's reaction to the numbers was to upgrade ELNK from "buy" to "strong buy," citing strong top line growth and better-than-expected cost structure improvements in the qtr. The firm raised its price target from $57.50 a share to $66.50. Given the low valuations of these companies, ISP's are about the only stocks in the Internet group that can be argued as possessing attractive near-term fundamentals. Now, let's see how these companies stack up against one another. Comparisons Earnings (Loss) Estimates 1998/1999: MSPG= $0.95/$1/60; PSIX= ($2.77)/($2.30); ELNK= ($1.48)/$1.16; AOL= $0.51/$0.91 Price/Sales Ratio (annualized from latest qtr): MSPG= 12.5; PSIX= 4.47; ELNK= 5.72; AOL= 13.5 Analyst Mean Rating: MSPG= Buy; PSIX= Buy; ELNK= Buy; AOL= Strong Buy