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Technology Stocks : Healthcare.com Corporation (Nasdaq: HCDC)was [HDIE] -- Ignore unavailable to you. Want to Upgrade?

To: Larry Brew who wrote (10160)	1/20/1999 9:12:00 AM
From: Emec	Respond to of 15094

When I authorize it ;-)

To: Larry Brew who wrote (10160)	1/20/1999 9:28:00 AM
From: Emec	Respond to of 15094

From report: New IBM partnership-under the agreement, both companies will jointly market HIE's message broker to 3 specific industries. This is not an exclusive arrangement but is similar to the relationship IBM has with NEON for the banking sector. This follows the HBOC agreement which secured HIE's leadership position in healthcare. We view the IBM partnership announcement as very positive for several reasons * It will provide provide a valuable recenue stream for the company in 1999 and beyond * It endorses HIE's enterprise application integration solutions and strategies * It gives the company access to an extensive IBM customer base * It proves HIE is an emerging leadr in the fast growing MOM market * It also prove that HIE's technology is transferable across virtually any industry. Arthur Anderson-This agreement gives HIE another avenue to distribute its products and will likely generate revenue beginning in Q2:98 ISG Sale- will improve the company's balance sheet by ading cash and reducing accounts receivable. We applaud the transaction for both parties. Although we are not raising our EPS forecast for 1999 at this time, we believe our targets are conservative and that the IBM partnership elevates the value of HIE. It is dificult to project when a distribution agreement will contribute to the top and bottom line and to what degree. We believe this agreement will eventually make significant contributions to HIE's growth but prefer to remain conservastive until the partnership materializes. HIE should start receiving IBM related orders in the second quarter of 1999. Distribution is king in the software business and the opportunity to partner with one of the world's largest computer companies significantly enhances the value of HIE in our view. Profitable Business Model-HIE's distribbution model provides significant operational leverage. Once a distribution arrangement starts to materilaize, it requires minimal incremental resources to generate revenue. Thus, small incremental sales from distributors can have a material impact on HIE's bottom line Value and Recommendation-Due to the emerging opportunitie4s for middleware companies and the inherent leverage in the softwar business model, several comparable companies are receiving tremendous valuations (80-100x 1999 First Call EPS estimates). We believe HIE will show some balance sheet improvements when it announces Q4-98 results on january 27th. Although HIE"s shares have apreciated 90% in 1999, the shares still trade at a discount to its peers. As HIE continues to meet our earnings estimates and improve its balance sheet we anticipate some P/E multiple expansion. We also believe there is attractive upside with the current multiple as we project EPS to grow 90% in 1999. We reitterate our Outperform-Specualtive rating and raise our 9-12 month price target to 415-$20 per share