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 : CMGI What is the latest news on this stock? -- Ignore unavailable to you. Want to Upgrade?

To: Jenne who wrote (8139)	5/12/1999 9:25:00 AM
From: James Thompson	Respond to of 19700

Raising Price Target to $300 Here is the analyst report. I had to take it off Acrobat and OCR. There may be OCR errors I did not catch. Sorry for the delay. DAIN RAUSCHER WESSELS (note: a market maker for CMGI) A DIVISION OF DAIN RAUSCHER INCORPORATED CMGI, INC. NASDAQ: CMGI BUY-AGGRESSIVE PRICE TARGET: $300 May 7,1999 Price: $227.13 52-Week Range: $330-$16 Year End: July Fiscal Year EPS P/F 1998A $0.37 NM 199SF ($0.09) NM 2000E ($0.93) NM Tr 12 ROE: 20.4% 3-Yr. EPS Gr: 50% Shares Out: 51.3 million Book Value: $13.18 Market Cap: $11.65 billion INTERNET SERVICES Peggy Ledvina pledvina@dainrauscher.com (612)813-1226 Mark Rupe mrupe@dainrauscher.com (812)313-1242  We are raising our price target on CMGI shares to $300 from $220 to reflect appreciation of its Internet investments.  Silknet Software, a company in which CMGI owns a roughly 18.5% interest, successfully completed its initial public offering on May 5,1999. + We reiterate our Buy-Aggressive rating on CMGI shares, and we are increasing our price target to $300 Our price target is based on a 50% premium to the $200 per share current estimated market value. Raising Price Target To $300 We are increasing our price target on CMGI shares to $300 from $220. Since initiating coverage on April 1,1999, several of CMGI's investments have appreciated significantly in value. We have increased our price target on CMGI shares to reflect such appreciation. Instead of valuing CMGI on a price-to-earnings or revenues basis, we value the company on an estimated asset basis because of its business model. Accordingly, we estimated the values of the following components: Internet group. shares of publicly traded companies. fulfillment services companies, minority investments, and cash  We estimate die company's Internet group of majority-owned companies to be worth roughly $5.7 billion. or $110 per CMGI share. This value is based entirely on valuations the market is currently awarding to comparable. publicly traded companies + Rather than valuing CMGI's stock holdings in public companies at current market prices, we elected to value such holdings at DRW price targets, or if not covered by DRW, at current market prices. As a result, we believe the value of CMGI's ownership in public companies to be worth $2.3 billion, or $44 per CMGI share.  We believe that the company's fulfillment services companies are worth an estimated $700 million, or $13 per CMGI share, We arrived at such valuation by applying a multiple similar to that of comparable publicly traded companies. + In valuing CMGI's minority ownership interests. we analyzed each venture and assessed its strategic plan and viable opportunity and assigned a conservative value based on certain criteria While difficult to determine. we valued the companies minority ownership interests at $1.7 billion, or $32 per CMGI share  The company currently has a cash position of $106 million, or $2 per CMGI share. In short, we believe the current market value of CMGI shares to be $10.4 billion. or $200 per share. However, we believe that CMGI shares should trade at a 50% premium to our estimated value, based on: 1) continued strong demand for Internet stocks; 2) CMGI's uncontested market position and tightly branded name; 3) CMGI's excellent reputation for developing Internet companies; 4) the potential upside in value created by CMGI portfolio companies going public; and 5) CMGI's untapped international potential. Accordingly. we have established a new price target of $300 per share, or a 50% premium to CMGI's estimated asset value of $200 per share CMGI investment completes its IPO. Silknet Software. a company in which CMGI owns roughly 18.5% (post deal), successfully completed its initial public offering on May 5, 1999 Currently valued at $450 million, CMGI's position is worth roughly $83 million (in line with our projection). Stock Opinion: We estimate fiscal 1999 and 2000 revenue and EPS of $177.8 million and $271.3 million and EPS of ($0.09) and ($0.93). respectively. We reiterate our Buy-Aggressive with a price target of $300 based on a 50$t premium to the $200 per share current estimated market value. Dain Rauscher Incorporated makes a market in CMC£ Inc and may act as principal with regard to sales or purchases of this security Austin  Dallas  Houston  Minneapolis + New York  San Francisco [~rY tAPr~A I M R Kr T