Uncharacteristically upbeat analysts
penned a slew of bullish reports Friday, a day after
several large e-commerce companies announced
surprisingly strong quarterly earnings.
Littering their research notes with "outstanding"
accolades and praising companies for giving them
"greater confidence" in a variety of business models,
analysts seemed especially stoked about Commerce One,
eBay, Emulex and Epiphany.
"Across the board, Commerce One reported a very solid
quarter, in our view, clearly establishing itself as a
leading B2B name," wrote Eric Upin,
business-to-business e-commerce analyst for Robertson
"The quarter was characterized by several key customer
wins, real signs of traction with the SAP
relationships, the close of the AppNet acquisition,
and a deepening of its product and service offerings."
Pleasanton, Calif.-based Commerce One builds online
marketplaces for a variety of industries, and it's one of
the technology partners powering the automobile
industry's massive Covisint exchange. The company
makes money from fees based on sales within the
marketplace and consulting work for its clients.
Commerce One reported third-quarter sales Thursday
that increased 10-fold from the same period in 1999, smashing Wall Street
expectations and boosting the stock more than 9 percent in
after-hours trading. The stock traded Friday morning
at $67.25, up a more modest $5.28 since Thursday's
Commerce One also reported that third-quarter revenue
was $112.7 million, up from $10.4 million in the same
quarter last year. Analysts polled by First
Call/Thomson Financial were expecting roughly $85
Commerce One chief executive officer Mark Hoffman also
said Thursday that he expected the company to become
profitable in the second-quarter, one quarter earlier than his previous
In response, several financial institutions
emphasized their already bullish stances on Commerce
One. Banc of America, US Bancorp Piper Jaffray and
Wasserstein Perella each reiterated "strong buy"
First Union Securities upgraded the company from "buy"
to "strong buy," while ABN Amro remained relatively
cautious, reiterating its "buy" rating.
Analysts also applauded Epiphany, a San Mateo,
Calif.-based company that makes software to gather and
analyze customer data for corporate clients.
Customers, including Hewlett-Packard, can use
Epiphany software to spot trends in customer surveys
and other sources such as telephone call centers,
order-processing systems, Web sites and email.
Epiphany reported Thursday that third-quarter sales
increased eightfold, helping the company post a
narrower-than-expected loss. It also announced a 3-for-2 stock split,
payable Nov. 13.
The company reported a third-quarter loss of $277.3
million, or $6.52 a share, compared with a loss of
$6.8 million, or 91 cents, in the same period of 1999.
Excluding charges, it lost $7.0 million, or 17 cents,
compared with a loss of $6.0 million, or 34 cents, in
the third quarter last year.
According to Epiphany's quarterly results, sales
reached $39.1 million, compared with $5.3 million in the
same quarter last year. Analysts were expecting
roughly $33.7 million.
Shares jumped 22 percent on the news in after-hours
trading on Thursday. They continued to surge Friday
morning, trading at $87.63, or 35.33 percent higher
than Thursday's regular closing price.
Credit Suisse First Boston and Prudential Volpe
reiterated "strong buy" ratings, while First Union
Securities reiterated a "buy" rating.
Banc of America Securities and US Bancorp Piper
Jaffray upgraded Epiphany from "buy" to "strong buy."
Robinson-Humphrey boosted it to "buy."
Robinson-Humphrey analyst William B. Chappell, Jr.
dubbed Epiphany's third quarter "outstanding,"
raising his fourth-quarter revenue estimate to $46
million from $41.2 million. He raised his 2001 revenue
estimate to $266 million from $243 million.
"The number of new customers was down from the 70
added in Q2, but the company focused on cross-selling
opportunities during the traditionally slower summer
quarter," Chappell wrote in a report released Friday.