Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Modem Media . Poppe Tyson (Nasdaq: MMPT) -- Ignore unavailable to you. Want to Upgrade?

To: Irish King who wrote (428)	3/5/1999 3:56:00 PM
From: rbarsom	Read Replies (1) \| Respond to of 821

better get some good news or something, i know these guys i think they are doing good stuff but geez it should pop to old high

To: Irish King who wrote (428)	3/6/1999 8:39:00 PM
From: Sonki	Read Replies (1) \| Respond to of 821

Mr. King, u r so wise... here is a gift for u. buy w/ a 38 target .. what was ur entry??if u belive in something...double up.. mortgage your house, wife, kids, cats etc... I normally do not invest in an ipo but this one looks reasonable. Do you know anything about the mngmt? or how did u get this one thru a broker recommendation. ============================================================== Initiating Coverage with a BUY and a $38 Price Target. -Initiating with a BUY and a $38 price target. Our $38 price target is predicated on a proposed revenue multiple of 8x applied to our calendar 1999 revenue estimate of $53 million. This multiple represents a 22% discount to the comparable group's 10.3x 1999 revenue multiple. We believe there is upside potential to our conservative 1999 revenue growth estimate of 25%, but we remain conservative to reflect the company's excess capacity post acquisition of Poppe Tyson. - Leader in rapidly growing Internet E-commerce Services market. The company provides "mission critical" creative/systems integration services to Fortune 500 companies seeking to establish large-scale web-based points of presence to exploit the full range of web-based applications from branding to direct selling and after-sale customer service and support. IDC estimates the Internet and E-commerce services market to grow from $4.7 billion in 1998 to $22.1 billion by 2002 - a 48% compound annual growth rate (CAGR). - Blue-chip client base represents large re-occurring revenue stream. The company has approximately 34 domestic clients and 20 international clients, including blue-chip clients in the financial services, communications, retail and electronics industries (the top 5 customers accounted for 57% and 55% of revenue for 1997 and the nine months ended 9/30/98). Customers include AT&T, Citibank, IBM, JC Penney, John Hancock and Sony. The company's established 1997 relationships accounted for roughly 85% of revenue during 1998 and we expect this trend to continue. Valuation and Model Discussion Attractive Valuation. We believe Modem Media.Poppe Tyson's shares are currently trading at a discount to the company's closest comparables which provides a good opportunity for share appreciation. MMPT is currently trading at 6.1x and 4.7x calendar 1999 and 2000 revenue estimates of $53.3 million and $70.0 million versus the comparable universe of 10.3x and 5.8x. We are establishing a $38 price target representing a 26% appreciation from the 3/1/99 closing price of $30 1/8. - Increased amortization. In connection with the Modem partnership combination, True North is obligated to pay the former owners of the Modem partnership up to $18.6 million as additional consideration upon completion of the IPO. The amount will increase amortization of goodwill by roughly $300k per quarter for the next 18 years. - Taxes. The company is paying taxes, despite pretax losses, because of issues relating to its foreign subsidiaries. The company's domestic operations are profitable, generating taxes payable, but MMPT did not recognize a tax benefit from the losses on foreign subsidiaries and amortization of goodwill is a non-deductible expense. Key Selling Points Leadership Position. Modem Media is a leading, full service provider of digital interactive marketing solutions for Fortune 500 companies, and emerging companies with online business models. The company has approximately 34 domestic clients and 20 international clients, including blue-chip clients in the financial services, communications, retail and electronics industries. Customers include AT&T, Citibank, Compaq, JC Penney, John Hancock and Sony. The company has won numerous industry awards and currently has four offices in the U.S., three offices internationally (Toronto, Hong Kong, London), and an affiliate in Sao Paulo Brazil.