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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: Boplicity who wrote (7948)	4/14/1999 8:00:00 PM
From: Neal davidson	Respond to of 29970

Gregory and thread: More positive press...From The Motley Fool <THE RULE BREAKER PORTFOLIO> @Home's First Quarter Thumps up? Thumbs down? Thumbs horizontal? by Jeff Fischer (TMFJeff) ALEXANDRIA, VA (April 14, 1999) -- Yesterday afternoon @Home (Nasdaq: ATHM) announced first quarter '99 results that were in-line with expectations. Today the stock declined 12% in tandem with deflating prices of many Internet leaders and the near 3% fall of the Nasdaq market. Reviews of @Home's first quarter results were mixed. If the results were a movie, they wouldn't sweep the Oscars, but they would be called "a quality production" and the producer would be said to have significant promise. Let's put on our Foolish reviewer's cap and take a look at @Home's first quarter. Thumbs up? Thumbs down? Or thumbs sideways? (Thumbs sideways is a lame rating that shouldn't have been created. That's like saying to someone after you see them give a speech or perform on stage, "Yeah, you were ok. Whatever.") Anyway, lights... camera... action! @HOME MEETS MR. FIRST QUARTER Written by Mr. Tom Jermoluk, CEO Produced by Tom Jermoluk and 570 employees Excluding charges, @Home reported a loss of $8.9 million, or 7 cents per share (meeting estimates), as first quarter revenue rose 30% to $25.1 million. The company's subscriber base jumped 39% from the end of 1998 (when it had 331,000 subs), ending the first quarter at 460,000. The subscriber base has grown 413% in the last year. (Ok. This is pretty good so far, but dry. The scene is set. Time for the problem.) The stock fell $23 today. (Ok. That was a typically quick Hollywood drive-by shooting scene.) Some argue that @Home declined more than other Internet stocks today because the company's revenue and subscriber growth was not up to snuff. Some even proposed that @Home could miss its goal of 1.1 million subscribers by the year 2000. Although a shortfall is always possible, it doesn't seem the most likely outcome. @Home is steadily increasing its reach (up to 15 million homes from 13 million last quarter) and after growing subscribers 39% this quarter, if it can increase subs by 35% each of the next three quarters (not easy, but far from impossible), it will have over 1.13 million subscribers before 2000. The fact that AT&T (NYSE: T) is committed to upgrading TCI's cable lines in an orderly fashion should help @Home reach goals, as will @Home's growing partnerships with cable companies and the concurrently soaring demand for high-speed Internet access. Also of assistance eventually -- perhaps before 1999 ends -- will be @Home's TV set-top Internet service. TV access isn't the focus right now (merely getting into homes is), but it represents a market of over 60 million homes that will be split among Internet providers. If the success of cable TV is any guide, Internet via the television (it's like enhanced television on a whole new level) will probably succeed in the long term, too. Generally, @Home's mission is being executed as expected, with its cable reach steadily draping this continent and other countries (including Japan and the UK). Large surprises did not accompany this first quarter report. However, nebulous concerns rose above Wall Street like columns of thin smoke on a warm evening -- concerns that swirled around the topic of @Home's future growth. These kinds of concerns are experienced at almost all fast-growing companies, though, at various points in their history. None of them were well defined, which gives us reason to think they're random and not significant in the long term. Whatever the reason for the stock's decline (a combination of its quick rise, the concern, and the stock market dropping), following the strong ascent (@Home was one of the top performers on the market in the first quarter), it isn't surprising to see the stock sink. The same holds true for most Internet stocks right now, all of which could arguably use a break following their recent sprint. Our long-term objective in owning these stocks (AOL, AMZN, EBAY, AHTM) has not changed. With @Home, our reason to hold the stock lies in the fact that it is the leader (Top Dog, First Mover) in high-speed cable Internet access and it has smart management. Period. @Home now has distribution deals with 21 cable partners, up from 16 at the end of last year, representing potential access to 61 million homes. No competitor comes close. @Home's pending partner -- Excite (Nasdaq: XCIT) -- will announce earnings tomorrow after the market closes. Excite is expected to report positive earnings of $0.05 per share, up from a loss last year, while revenue should more than double to above $52 million. The merger with Excite will give @Home more advertising revenue and should help grow its subscriber base, too. The partnership should become official in late May. @Home shareholders, check out excite.com if you haven't.