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BEA Systems


shrugged off the selling pressure Monday as the software vendor's growing legion of fans sang its praises.

Even with the


swooning and the

Dow Jones Industrial Average

falling below 10,000 for the first time since December 2003, BEA was going strong in midafternoon action. The stock rose 2%, fueled by a flurry of positive comments from sell-side analysts.

The gain is noteworthy because Wall Street has been fretting about BEA's ability to deliver the goods Thursday, when it is due to report first-quarter financial results. Since April 1, the San Jose, Calif., company has lost 17% of its market value. Over that period, the broader Nasdaq was off 5% and the Goldman Sachs Software Index was off 4%.

But recently, analysts have come around to the company's cause. In a note published Monday, Smith Barney analyst Tom Berquist upgraded the stock to buy from hold, saying, "We believe that the recent sell-off has been overdone and that the company's shares are attractive at this point." Berquist set a target price of $13.50, adding: "We believe shares have sold off largely on fears of a miss on the quarter by the company," he wrote. "We do not believe this is likely." (Smith Barney doesn't have a current investment banking relationship with BEA.)

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Last week, Goldman Sachs analyst Sarah Friar used similar language. Friar noted that the company added $42 million in deferred revenue to the balance sheet in the January quarter, saying, "This should provide some cushion through fiscal 2005."

Deferred revenue is recognized on the income statement incrementally as software is actually delivered. Until then, the revenue, which is collected upfront, remains on the balance sheet.

BEA is now trading at about 29 times Friar's forward earnings estimate, which is "in-line with the broader software group

and ... well below BEA's post-bubble premium multiple of 40 times," she wrote. (Goldman Sachs has done investment banking for BEA.)

Kevin Buttigieg of Kaufman Brothers said he is seeing high levels of interest in BEA's flagship WebLogic Platform 8.1. Still, he doesn't expect the product -- in essence a suite encompassing new versions of major BEA products -- to contribute much revenue until the second half of the fiscal year. (Kaufman Brothers doesn't have a banking relationship with BEA.)


said in February that it expects revenue in the first quarter to range from $260 million to $270 million, with license revenue ranging from $127 million to $132 million. The company didn't give explicit earnings guidance, but CEO Alfred Chuang told

that he expects earnings of around 9 cents a share, which is a penny ahead of the consensus. Analysts polled by Thonson First Call are expecting revenue of $266 million in the April quarter.

On Monday, the stock rose 24 cents to $10.80.