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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: bh who wrote (2093)	9/3/1998 2:16:00 PM
From: Just_Observing	Respond to of 4509

Here is the latest research from Merrill Lynch released on Sept. 1. It may provide a preview of the conference call later today. "Enterprise Software News - 1 September 1998 4 PeopleSoft C-1-1-9 Price EPS '97 (A) EPS '98 (E) P/E '98 (E) 5 Yr Growth (E) $27.31 $0.43 $0.66 41 45% Merrill Lynch. PSFT came under heavy selling pressure as investor concerns regarding license revenue strength resurfaced during last week's down market. We spoke with management to ascertain current business conditions regarding license fee growth, Y2K and pricing pressures. Management is very comfortable with the Street's estimates as it moves into its last month of the quarter with the company "hitting on all cylinders". We also came away with a better understanding of the growing importance of Consulting Services for the company. Aside from the well documented fact that bodies are increasingly hard to come by in the booming US economy, the company's push into the Supply Chain and specialized Vertical industries has had a compounding impact. To demonstrate its expertise in these areas, the company has had to build teams of specialized, competent and experienced consultants that can augment or sometimes supplant the services of PeopleSoft's partners in systems integration. This build out of consultants is necessary to both win and maintain business in the more resource intensive deployments of supply chain and vertical-specific software. The company's newest products, PeopleSoft Select and PeopleSoft Manufacturing, although growing from a small base are "hitting on all cylinders", while its more established Higher Education and Public Sectors are "growing like gangbusters". The company is also not experiencing any pricing pressures due to competiton, or seeing businesses turn away due to other Y2K issues. In summary, we believe the "when it rains, it pours" phenomenon is at work here, and investors are searching for clues for the downturn. We remain convinced of the basic fundamentals at PeopleSoft; strong product; loyal user base; healthy market opportunity (US and Europe) and continued management execution to pull the stock through. We maintain our BUY rating."