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 : Stock Watcher's Thread / Pix of the Week (POW) -- Ignore unavailable to you. Want to Upgrade?

To: Stock Watcher who wrote (4737)	3/23/1999 8:57:00 AM
From: Due Diligence	Read Replies (1) \| Respond to of 52051

March 23, 1999 CARREKER-ANTINORI Carreker Reports 4Q-F98 Results in Line with Expectations; Maintain Buy Recommendation Steven S. Birer (415) 248-4091 steven_birer@rsco.com Carreker-Antinori CANI $5.94 3/23/99 Industry: Information Services Change in Yes/No Was Is ...Rating: No Buy FY Jan. F1998A F1999E F2000E ...EPS F1998A: Actual $0.33 EPS: 1Q $0.03 $0.06 -- ...EPS F1999E: No $0.40 2Q $0.10 $0.10 -- ...EPS F2000E: No $0.50 3Q $0.10 $0.11 -- 4Q $0.09 $0.13 -- 52-Week Range: $13-4 Year $0.33 $0.40 $0.50 Shrs Out (MM): 18.8 P/E 18.0x 14.8x 11.9x Market Cap ($MM): $111 Cal Year $0.33 $0.40 $0.50 Average Daily Volume (000): 87 Cal P/E 18.0x 14.8x 11.9x 1/99 Book Value/Share: $3.04 Revs($M) F1998A F1999E F2000E C1999 ROE: 12% 1Q $10.3 $12.5 -- 1/99 Tot Debt/Tot Cap 0% 2Q $13.7 $17.0 -- Price/Book 2.0x 3Q $13.9 $17.5 -- 1/99 Net Cash/Share: $1.79 4Q $15.2 $18.0 -- Div/Yld $0.00 NM Year $53.1 $65.0 $81.3 5 Year Sec Growth Rate: 25% EqtyMkt/Rev 2.1x 1.7x 1.4x Note: Future estimates, 1Q-98, 2Q-98, and 3Q-98 do not reflect Genisys acquisition (1/99); Fiscal Year = Calendar Year Key Points: · Excluding the financial results of the Genisys merger (accounted for as a pooling of interests), revenues and earnings of $14.5 million and $0.10 were largely in line with our $14.1 million and $0.10 estimate. Including the impact of Genisys, revenues and earnings came in at $15.2 million and $0.09 (excluding a non-recurring $485 thousand merger related charge). · Revenue upside was due primarily to strong software license sales, as consulting services were somewhat lower than expected. However, we believe it should be noted that there tend to be arbitrary fluctuations between these two categories. In many instances, Carreker can recommend either consulting or software solutions, depending on the best fit for the client. · While the Genisys acquisition was slightly dilutive to 1998 and fourth quarter results, we believe it will be accretive in 1999. Importantly, Carreker gains Genisys' Internet development capabilities, which we believe will play an important role in enhancing existing software products and developing new offerings. We also believe Carreker will be able to cross-sell Genisys' software to its existing customer base. · We believe Carreker is well positioned for growth through 1999 and into 2000. Recent contract wins in the Yield Management and Consolidations groups improve revenue visibility into 2000, while the new Enterprise IT Solutions group and marketing channel partners provide new avenues for growth. Furthermore, the company continues to enjoy 90%+ client retention. · We believe there is a disconnect between the current valuation of the company, its business prospects, and recent performance. Based on the company's strong market opportunity, combined with the significant upside potential that we perceive in the stock, we maintain our Buy recommendation.