B) Quick and loose on PUMA. Added today at $23.06
Rated a BUY
24-Aug-00 AFTER THE CLOSE
PUMATECH (PUMA) 23 7/16 +2 7/8: Reports Q4 loss of $0.08 a share, $0.03 better than the First Call consensus of ($0.11), vs year-ago earnings of $0.01. Stock giving back most of the day's gains in after hours, now trading at 21 1/2. Revenue increased 52% to $9.03 mln.;
22-Aug-00 12:55 ET
Pumatech (PUMA) 20 9/16 +1 9/16: This former highflier has been stuck in a holding pattern for the last few months, but some product announcements and anticipation of a good quarterly report this week are keeping the shares on our radar screen. Yesterday PUMA announced a deal to provide their Browse-it Web rendering/browsing software with Card Access's Springboard - compatible Wristband Thincom Portable Modem. The agreement will allow Handspring (HAND) Visor users to view Web content online through Card Access's Thincom Portable Modem, as well as the option to take Browse-it "SnapShots" for offline viewing. Today's news was the long-anticipated launch of Satellite Forms Server (formerly known internally as Vulcan). The software allows Palm (PALM) users to create specialized applications on their PDA that securely links to their corporate network server database. PUMA is trying to become the market leader in synchronicity of wireless devices such as PDAs and cell phones to back-end network server databases and office PCs. The goal is to allow mobile executives to update such critical data as contacts, inventory, expenses, etc. through the different operating systems that each component utilizes. The market opportunities for the applications are enormous -- the wireless enterprise access market is expected to grow at about 50% annually as corporate IT departments outfit their employees with mobile access. Although PUMA was one of 1999's best NASDAQ performers, this year has seen the stock shed over 50% of its value and significantly underperform the NASDAQ. The market's sentiment has changed, but the story at PUMA hasn't. The company is growing revenues at a rate of over 45% annually while bolstering their technology through strategic acquisitions and heavy R&D investment. Here's what the market doesn't like about PUMA: 1) the company is still very small -- expected to post annual sales just south of $30 mln. 2) PUMA is still operating in the red -- expected to record a net loss of over $18 mln this year. 3) valuation -- ttm P/S = 22.0x and forward (FY00) P/S = 26.4x. That said, we're expecting another solid quarter from PUMA when they report after the close Thursday. The company indicated a robust backlog last quarter, so Q4 sales should come in strong. Look for revenues north of $8.6 mln, representing a 50% increase, and loss per share to beat the Street estimate of ($0.11) by a few pennies. - Matt Gould, Briefing.com
21-Aug-00 13:00 -- 14:00 ET
PUMATECH (PUMA) 19 5/8 +5/8: Company announces it has partnered with privately held Card Access to offer web browsing;
18-Aug-00 10:40 ET
PUMATECH (PUMA) 18 1/2 +1/2 (+2.8%): Stock has used support at the $17 1/2 level to mount a rally attempt. PUMA is a developer of mobile device management and synchronization software. Stock has traded in a 52-week range of 2 1/4 to 102 7/16.... volume 340K; intraday range 17 9/16 to 18 15/16.
02-Aug-00 10:00 -- 11:00 ET
PUMATECH (PUMA) 20 7/16 +2 1/8: Wedbush Morgan initiates coverage with a STRONG BUY rating and 12-month price target of $38; expects another large portal deal in the near future; company should generate positive operating income by Q3 in FY02.
10-Jul-00 11:00 -- 12:00 ET
PUMATECH (PUMA) 25 15/16 +1 1/4: Frost Securities reiterates STRONG BUY rating and price target of $98 after company announced it is acquiring privately held Dry Creek Software; acquisition will strengthen PUMA's ability to roll-out new MAP (Mobile Application Platform).
10-Jun-00 Pumatech (PUMA) 34 3/4: Company is a leader in the rapidly growing wireless-Internet marketplace... Recent acquisitions of NetMind and ProxiNet give Puma the broad range of Web-based personalization services and technology needed to become a top-tier infrastructure provider for mobile, wireless and Internet appliance-based e-business... We expect the company to continue growing top-line by better than 40% (year/year) in the quarters to come... While increased R&D and sales/marketing expenses will continue to pressure the bottom line over the near-term, Briefing.com notes that despite these increases, the company still managed to beat street expectations when it reported third-quarter results a couple weeks back... Basically, this is a well-run company in one of the fastest-growing segments of technology.
09-Jun-00
Synchronize!
[BRIEFING.COM - Robert J. Reid] Have you ever updated the calendar on your Palm, rescheduling a meeting for Monday, only to get to your office and find that your PC still has it for Friday? Pumatech's (PUMA 36 7/16) synchronization software called Intellisync enables all of your digital devices (PCs, laptops, smart phones, smart pagers, cell phones etc.) to "be on the same page." This ability applies not only to your calendar, but to a broad range of PC-based personal management tools such as contacts, to-do lists, appointments, e-mail, and calendars using applications such as Microsoft Outlook/Exchange/Schedule, Lotus Notes/Domino, Novell Groupwise, etc. When you add an item to your to-do list on your PC, for example, synchronization software causes your hand-held device to show the item as well. It eliminates redundancy and inconsistency among your digital devices. Briefing.com believes that Pumatech is well-positioned to lead this segment.
Intellisync.com
A few months ago, Pumatech launched what it calls its Internet initiative, which in a nutshell means it will use the Web to be the synchronization engine. This summer, Pumatech will launch Intellisync.com. Here's how it works: Imagine you have 25 contacts on your Palm Pilot, 35 contacts on your cell phone, a Yahoo! e-mail address book with 15 addressees and an Internet-based calendar with PlanetAll.com. By subscribing each device and product at Intellisync.com, the site would then generate an encrypted, password-protected database of your information and sync all your devices through the Web. With Intellisync.com, Pumatech is attempting to be the first company to offer the ability to use the Web to update hand-held devices without having to go through your PC. The company's Browse-It and Mind-It software products will also be offered through Intellisync.com. Pumatech plans to market and license its Web-based products and solutions to e-commerce providers, Web portals and individual consumers. Pumatech also plans to offer these new products and solutions to corporations. The service is free for end-users with Pumatech making its money from signing up licensees.
MAP: More Than Just Synchronization
Pumatech's synchronization software is just one component of what it calls its MAP (Mobile Application Platform). Other exciting MAP components include Browse-It which Pumatech launched just this week. Browse-it software provides Palm users with the ability to view Web content on-line while utilizing a wireless or wireline modem, and the option to take Browse-it "SnapShots" for off-line viewing when wireless or wireline Web access is not available. It has the look and feel of desktop browsers. Browse-it supports Palm-compatible handhelds and will be offered as a service on Intellisync.com and will be bundled in future versions of the Intellisync product line. Another software product is Mind-it which allows users to have their own personal tracking and email alert system. Mind-It allows users to track almost anything that you can see in your browser, including the entire page, any portion of text on a page, images, links, even keywords. Mind-It will email you when something changes. Good uses for Mind-It are: eBay auctions so users can be alerted when the auction price has changed and for passengers to be notified as soon as a flight becomes available, for example. An advantage of MAP is that it provides quick and easy deployment with proven scale, unlike competitive offerings, which typically require a band of consultants to build a custom solution without proven scale.
Conclusion
The launching of the initiative has been sapping Pumatech's resources in order to develop and market the portal as has the integrating of the technologies recently acquired with the ProxiNet merger. In spite of currently operating in the red, there is reason for a good deal of optimism for earnings growth once we get beyond this transition period. First, PUMA did a bang-up job signing up licensees in the April quarter with 38 new customers licensing MAP bringing the total to 120. Similarly, enterprise adoption also increased in the quarter as more than 200 corporate enterprises licensed Intellisync. Second, PUMA has made some exciting recent acquisitions: ProxiNet Inc. (which when PUMA's synchronization technology and ProxiNet's web connectivity technology are combined, a number of product offerings will spawn) and NetMind (Mind-It delivers highly personalized, relevant Internet content to more than 7 million active users). Third, we believe the stock has been unfairly hammered from a high of $102 and that the recent run-up in shares is not finished as investors are anticipating the release of Intellisync.com this summer. The wireless stocks have been a hot sector recently, but we do not believe that Pumatech is being recognized for its exposure to this market. Pumatech is well positioned to benefit from the explosion in wireless devices accessing the Internet. Earnings should begin to ramp-up as the company gets through the expenses relating to the transformation.
05-Jun-00 09:37 ET
PUMATECH (PUMA) 28 1/8 +1 1/8 (+4.2%): Introduces Browse-it software, which allows Palm users to view Web content online while utilizing a wireless or wireline modem, and the option to take Browse-it ``SnapShots'' for offline viewing when wireless or wireline Web access is not available.
26-May-00 11:00 -- 12:00 ET
PUMATECH (PUMA) 20 3/4 -13/16: -- Update -- H.C. Wainwright reiterates STRONG BUY rating after the company posted better-than-expected Q3 salea and EPS results after the close yesterday.
26-May-00 BEFORE THE OPEN
PUMATECH (PUMA) 21 9/16: Frost Securities reiterates STRONG BUY rating and price target of $98. After PUMA reported solid results for Q3 with sales at $8.0 million, versus expectations of $7.5 million. The company also reported backlog as greater than this quarter’s revenue, along with continued increases in deferred revenue.
EPS 0.09a to 0.03a to (0.06)a to (0.08)a Jul00 per breifing.com
Rev 5.2M to 5.7M to 6.3M to 7.0M to 8.0M to 9.0M Jul00
52-Week Low on 25-Aug-1999 $2.688
Recent Price $20.563
52-Week High on 10-Mar-2000 $102.438
Market Capitalization $862.1M
Shares Outstanding 41.9M
Float 31.9M
Price/Book (mrq) 8.11
Price/Earnings N/A
Price/Sales (ttm) 23.81
Debt/Equity (mrq) 0.01
Total Cash (mrq) $91.5M
Short Interest As of 10-July-2000
Shares Short 885.0K
Percent of Float 2.8%
Shares Short (Prior Month) 960.0K
30+ insider sales in 2000, buys were options excercised.
Institutions moving up to 28% from 15% three quarters ago.
Big days are green, six green days in a row. Dropped from $40 in June to present level. MACD is green.
CC Notes from today
- 6M in deferred rev up 16% from q3
- 21% rev q2q excluding note books. Legacy notebook is seven years old and declining.
- Expanding into Europe and Japan
- 85M in cash and investment, very little debt
- Affected by shortage of Palms and flash memory.
- Lockout prohibited trading. CEO sold shares to diversify holding, Still Rowe is largest holder and purchased more than sold.
- Intellisynch.com is in beta and rollout in October 2000.
- WAP handsets are sold but not being use as a data device due to difficult of use
- NTT Docomo has 10M subscribers in Japan
- Plan to provide a comprehensive service that scales and be the killer app in wireless
- 1000 corporate customer using Intellisynch
- Competitors underestimating the need for synchonization in applications
- Believe PUMA is building a killer app equivalent to MSFT office product
- Most rivals are single channels vs. our multiple channels
- $10/mo for basic is est and $80/yr. For new service.
- 100M potential user in wireless and growing 30% per year.
- Some users will prefer a free service, but PUMA targeting high end with comprehensive services.
- Still on track to announce major partner latest this year.
- 150+ licensing relationships.
- Feel the shrinkwrap model moving to a scalable subscription service.
- Vulcan is a satellite based server. Targeting rental cars, insurance, and financial companies.
- AETH brings in small army of C+ programmer to develop software and also update. PUMA is scalable and don’t need C+ programmers because it automated.
- Most wireless devices will use Java so we are moving this direction. Satform/vulcan in beta with 100 customers.
- We have an off the shelf product if I-mode by NTTdocomo hit the US.
Q&A
- Expect break even in 4 quarters
- FY2001 started few weeks back. Will concentrate in Europe (UK, Germany, France)
- Alerts.com is number one competitor. Have taking jobs away from them.
- Have EBAY as marquee client
- Avantgo? is IPO coming out competitor. Our services are integrated and have dominante the sector in market share.
- Biggest event in Japan in q4 was second delivery for Docomo for Lotus notes, which has 60-70% of groupware market
- DSO was 63 days
- 150th MAP license last quarter
- $100 a seat license for docomo, only one quarter of sales so far
- Softbank is 50% of sales in Japan?
- KDDI is a partner and license MAP architecture
- Have two largest carriers in Japan as partners
- Fortune 2000 companies are very protective of wireless data. Want to manage it by their IT department. That’s where PUMA sells corporate servers. 1000 corporate customers. 150 licensees.
- The free service when launch will affect customers. We want to make sure the PDA user is completely connected.
- Nokia is our most visible customer in Europe. Very big customer inside corporate NOK too. Been working with them 3 years.
- Has a deal with ALA. Symbion? And Syion? are partners in Europe.
- Only announce relationships as customer deploys product.
- US wireless 3 years behind Japan in wireless, and 18 months by Europe. Only US uses phone to talk. Japan used it for entertainment to.
Summary
Gapped down in the after hours. I listened to the CC and I was impressed with Rowe. Such vision and grasp of the sector. Going after market share vs. profitability so traditional model will try one’s patiences when the typical investor want q2q growth in rev and profits. Big client in October should move it. PUMA is right on Japan using the phones more and pushing technology. If they could partner with MOT and ERICY then they truly have got the killer app. Downside is $16, upside is a double by October. Only 41M in outstanding shares so insiders selling not bothering me.
Jack |
