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.

Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Jenna who wrote (28434)	3/18/1999 10:59:00 PM
From: kendall harmon	Respond to of 120523

NETA. Here is a summary of the key research report from the Bancboston Robbie Stephens analyst who led to the carnage. Make sure to do your own thinking about this. I think today was overdone and a bounce is likely. NETA: LOW FIRST QUARTER VISIBILITY; DOWNGRADING TO BUY March 18, 1999 SYMBOL(S): NETA ANALYST(S): POWERS, JOHN RATING: BUY Synopsis: The following synopsis is qualified in its entirety by the more detailed information contained in the full research report, including the discussion of certain risks associated with an investment in this security contained in "Investment Risks." Research dated prior to September 1, 1998 was prepared by an entity that was acquired by BancBoston Robertson Stephens Inc. Key Points: Downgrading NETA to BUY. We believe business through February was on track, but that through the middle of the all important third month of the quarter, the closure rate is lagging. The greater risk in the quarter may be reflected in a marked increase in Days Sales Outstanding (DSOs), or even reported total revenues lower than our estimate of $285 million. Currently, we believe the typical quarter is 25%, 25%, 50% on a monthly progression. SEC concerns are overblown, in our view. Our concern for the company's first quarter results stems not from any SEC issues, but from a general slowdown in the deal closure rate. Given the company is in the process of rearchitecting its new fully-integrated product line, customers could be postponing purchases to wait for the new product suites in Q2 and Q3. We do not sense any Y2K related secular slowdown. Summary and valuation. At its current price of $35.06, Network Associates is trading at a P/E of 16.4x our expected 1999 EPS estimate of $2.14 and at 4.0x expected 1999 revenues. Given