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EMBT |
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From Dr. Irv DeGraw's WorldFinanceNet:
Embarcadero Technologies EMBT
e-commerce software development tools
This firm makes software development tools needed for the rapid development and deployment of e-commerce applications. It?s principal focus is data base efficiency. The firm has an established distribution channel consisting of telesales in North America and distributors in Europe and Asia. It reports more than 21,000 users including such well known firms as AT&T, Aetna, Bell Mobility, Fidelity, Hewlett-Packard, IBM, and Williams Communications.
Although still small, growth has been impressive. Revenues grew at a 110.4% rate between ?98-?99, reaching $19.2 million. The firm added another $1.4 million in deferred revenues. Performance has been impressive for such a small and fast growing firm. It has a 94.4% gross margin, an 11.9% operating margin, and a 11.4% net margin. As would be expected, cash flows are positive. Immediately post offering, the firm would have an equivalent ?99 EPS of $0.086 and a $0.26 cash flow per share.
Valuations in this sector have been severely damaged by Nasdaq?s 4/14 plunge. On average, comparables lost more than 50% of their valuation in the week ending 4/14. Prior to this sharp decline, the sector was beginning to show weakness from saturation, but not at these levels. Recent IPO?s may provide some additional perspective. Silknet Software was a $45 million deal offered on 5/5. Offered at 15, it closed at $35.13 for a 134.2% first day. It recently traded at $55.88, adding 59.1% in the aftermarket. InterWorld was a $45 million deal offered on 8/11. Offered at $15, it closed at $17.75 for a 18.3% first day. It recently traded at $19.50, adding 9.9% in the aftermarket. Quest Software was a $61.6 million deal offered on 8/13. Offered at $14, it closed at $47 for a 235.7% first day. It recently traded at $26.50, off 43.6% in the aftermarket. Active Software was a $38.5 million deal offered on 8/13. Offered at $11 it closed at $14 for a 27.3% first day. It recently traded at $35.88, adding 156.3% in the aftermarket. OnDisplay was a $98 million deal offered on 12/17. Offered at $28, it closed at $77 for a 175% first day. It recently traded at $24.97, off 67.6% in the aftermarket and at the offer level. WebMethods was a $143.5 million deal offered on 2/11/00. Offered at $35, it closed at $212.63 for a 507.5% first day. It recently traded at $63.94, off 69.9% in the aftermarket.
worldfinancenet.com
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