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Technology Stocks : PSFT - 1999: The "Make-It-or-Break-It" Year? -- Ignore unavailable to you. Want to Upgrade?

To: bob zagorin who wrote (391)	3/31/1999 10:47:00 PM
From: Tom_	Read Replies (1) \| Respond to of 1274

Today's H & Q Report. Downgrade from Buy to Hold on Strong Buy-Buy-Hold continuum. {ie, SELL.} Expects quarter EPS in range of .00 to -.05. Calls it at -.03. {Note: Merrill Lynch says +.05.} Expects next three quarters at .01, .03 and .04 for a FY99 of .05, (FY98 was .62) and then a FY2000 of .25. {Merrill says FY99 .46 and FY2000 .60.} "Clearly, the ERP sector is worse than expected as the two leading vendors, SAP (SAP/HOLD/$26.56) and PeopleSoft, will fall short of expectations this quarter. Our own consulting contacts tell us that they are reallocating staff from ERP projects to next-generation application projects in anticipation of a very tough 1999." "... we now believe that the entirety of 1999 will be very challenging for ERP vendors. As a result, a rebound in the stock price within 12 months no longer appears likely." Worries about "significant" employee turnover, noting that re-priced options are now 25% underwater. ~~~~~~~~~~~~~ Bad, but not blood-in-the-streets time, IMO. 2900 customers and $1.3B trailing annual revenue. It's the sector, stupid? JMO <g> Best wishes, Tom