Analyst optimism sends BroadVision higher
Shares of the company rise 14 percent after analysts express confidence in the company's surging sales and product offerings.
Analyst Rick Sherlund of Goldman Sachs raised the e-commerce software maker to the firm's "recommended list" from "market outperform." Brent Thill of Credit Suisse First Boston also raised the Redwood City, Calif.-based company to "strong buy" from "buy."
"BroadVision has shown strong financial strength and a high degree of execution capability, and we believe the company will continue to display this strength in 2000," said Sherlund in his report. He also noted the company has beat Wall Street expectations for 16 consecutive quarters.
BroadVision announced earnings last week of 4 cents a share that doubled analysts' expectations of 2 cents a share. The company also posted revenue of $61.5 million, compared with $18.5 million for the year ago quarter, and net income of $10 million, up from $2.9 million.
Shares in the company closed today up $3.88 to $46.94 on volume of 21 million shares, nearly three times the average daily volume. BroadVision has traded within a range of $4.34 and $93.29 in the past 52 weeks. The shares have been split 3-for-1 twice in the past year.
The company helps customers such as Xerox and Wal-Mart establish e-commerce operations on the Web.
"History has shown that when the dust settles, there will typically be a couple of package applications that are the dominant players," said BroadVision treasurer Peter Downs. "People do not want to work with bits and pieces of different software products to cobble together a Frankenstein solution."
BroadVision's competitors include corporations that design a Web presence on their own, as well as companies such as Vignette and Art Technology Group.
The company does face some challenges.
"The biggest risk facing any software vendor is effective delivering on (software) implementation promises," said Thill in his report.
"While we have heard rumblings from our channel contacts other commerce vendors are coming on strong...BroadVision has recently stepped up its focus on ensuring customer success," he said.
Downs agreed that carrying out the company's strategy will be one of its biggest challenges.
"It's all about execution," he said, "and making sure you have the right people, processes and systems at the right time."