STOCKREPORTS |
PeopleSoft, Inc. |
Nasdaq Symbol PSFT
|
| 21-JUN-97 |
Industry:
Computer (Software & Services) |
Summary: This growing software firm develops and sells a family of cross-industry, human resource management, financial, distribution and manufacturing applications. |
 |
Recent Price  54.75
52 Wk Range 54.75 - 32.56 |
Yield Nil
12-Mo. P/E NM |
Quantitative Evaluation:
Outlook
(1 Lowest - 5 Highest)
NA
Fair Value
NA
Risk
MEDIUM
Earn/Div Rank
NR
|
 |
|
Technical Evaluation:
BULLISH
since 09/96
Rel. Strength Rank
(1 Lowest - 99 Highest)
89
Insider Activity
Neutral
|
Overview 14-MAY-97
Revenues in 1997 are expected to continue their rapid ascent, rising well over 50% from those of 1996, driven by solid gains in the licensing of core software products, as well as even more rapid growth in the services business. In 1996, license revenue generated from the Peoplesoft HRMS product totaled $142.5 million (56% of total license fees), versus $87.8 million (64%) in 1995. Peoplesoft Financials, Distribution and Manufacturing license fees totaled $110.3 million (44%) and $50.0 million (36%) in 1996 and 1995, respectively. Revenue growth should be strong throughout the world. Margins are expected to widen, on volume related efficiencies, despite a less favorable revenue mix of services. Comparisons in 1997 will benefit from the absence of $0.16 of nonrecurring charges recorded in the 1996 fourth quarter.
Valuation 14-MAY-97
The shares of this major applications software vendor, which more than doubled in 1996, have retrenched along with the general market thus far in 1997, despite continued rapid sales and earnings growth. The company's flagship human resource management system continues to grow rapidly. Peoplesoft has extended its application products to include financial, distribution and, most recently, manufacturing applications; these products are also being well received. The company's software applications are well positioned, and revenue and earnings are expected to grow rapidly in 1997. The shares were recently trading at 57X our projection of 1997 EPS. The stock deserves a premium valuation, in light of the company's superior growth prospects. However, we believe that the shares are fairly valued, and expect the stock only to move in line with the market in coming months.
Key Stock Statistics
| S&P EPS Est. 1997 | 0.70 |
| P/E on S&P Est. 1997 | 78.2 |
| S&P EPS Est. 1998 | 1.05 |
| Dividend Rate/Share | Nil |
| Shs. outstg. (M) | 108.7 |
| Avg. daily vol. (M) | 1.408 |
|
| Tang. Bk. Value/Share |
2.56 |
| Beta |
NA |
| Shareholders |
1,300 |
| Market cap. (B) |
$ 6.0 |
| Inst. holdings |
62% |
|
Value of $10,000 invested 5 years ago:NA
Fiscal Year Ending Dec. 31
| Revenue (Million $) |
|
1997 |
1996 |
1995 |
1994 |
1993 |
1992 |
| Q1 |
153.6 |
82.28 |
40.10 |
20.10 |
10.00 |
5.50 |
| Q2 |
NA |
102.7 |
51.30 |
24.90 |
13.30 |
7.30 |
| Q3 |
NA |
117.4 |
60.09 |
29.60 |
14.90 |
8.10 |
| Q4 |
NA |
147.7 |
76.02 |
38.30 |
20.00 |
10.70 |
| Year |
NA |
450.0 |
227.6 |
112.9 |
58.20 |
31.60 |
|
| Earning Per Share ($) |
|
1997 |
1996 |
1995 |
1994 |
1993 |
1992 |
| Q1 |
0.14 |
0.08 |
0.04 |
0.02 |
0.01 |
0.01 |
| Q2 |
E0.15 |
0.10 |
0.06 |
0.03 |
0.02 |
0.02 |
| Q3 |
E0.18 |
0.11 |
0.07 |
0.03 |
0.02 |
0.02 |
| Q4 |
E0.23 |
0.01 |
0.10 |
0.05 |
0.03 |
0.02 |
| Year |
E0.70 |
0.30 |
0.27 |
0.14 |
0.08 |
0.06 |
|
| Dividend Data |
| Amount ($) |
Date Decl. |
Ex-Div. Date |
Stock of Record |
Payment Date |
| 2-for-1 |
Oct. 23 |
Dec. 02 |
Nov. 15 |
Nov. 29 '96 |
|
Business Summary 14-MAY-97
PeopleSoft, Inc. designs, develops, markets and supports a family of cross-industry, human resource management and financial system applications for use throughout large and medium-sized organizations. Its products operate on a wide range of hardware platforms, including IBM mainframes, UNIX-based minicomputers from Digital Equipment, Hewlett-Packard and others, and personal computers operating on local area networks. The company has designed its software products specifically for the client/server model of computing. Revenues in recent years were derived as follows:
|
1996 |
1995 |
1994 |
| License fees |
56% |
59% |
61% |
| Services |
44% |
41% |
39% |
|
PeopleSoft Human Resource Management System (HRMS) products (which accounted for 55% and 62% of license revenues in 1996 and 1995, respectively) include the human resource module, which provides support for personnel administration, recruitment, position management, training and development, health and safety, skills inventory, career planning, affirmative action planning and EEO reporting; the benefits administration module, which provides the capabilities required to support daily benefits administration activities; the flexible spending account administration module for claims tracking and processing; the payroll module, which provides a full in-house payroll administration and production facility for payroll calculations, check printing, tax reporting and deduction and benefit calculations; and the payroll interface module, which provides an interface between HRMS data and third-party payroll systems.
The company's financial application product family (43% and 35%, respectively, in 1996 and 1995) includes the general ledger module; the receivables module; the payables module; and the asset management module. The company also offers distribution and manufacturing application products and application development and administration, analysis, reporting and workflow tools.
Important Developments
Apr. '97
In the 1997 first quarter, contracting activity for software products and related bundled services totaled $145.6 million, versus $74.1 million in the 1996 interim.
Feb. '97
In the fourth quarter of 1996, the company recorded nonrecurring charges totaling $29.4 million ($0.16 a share), consisting of $26.5 million related to the acquisition of the PMI manufacturing software vendors and $2.9 million for the acquisition of Red Pepper Software.
Capitalization
Long Term Liabilities:
None (3/97).
| Per Share Data ($) |
|
1996 |
1995 |
1994 |
1993 |
1992 |
1991 |
1990 |
1989 |
1988 |
1987 |
| Tangible Bk. Val. |
2.35 |
1.59 |
1.01 |
0.77 |
0.57 |
0.02 |
NA |
NA |
NA |
NA |
| Cash Flow |
0.52 |
0.37 |
0.21 |
0.10 |
0.07 |
0.03 |
NA |
NA |
NA |
NA |
| Earnings |
0.30 |
0.27 |
0.14 |
0.08 |
0.06 |
0.03 |
NA |
NA |
NA |
NA |
| Dividends |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
NA |
NA |
NA |
NA |
| Payout Ratio |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
NA |
NA |
NA |
NA |
| Prices - High |
52 1/4 |
23 1/2 |
9 7/8 |
5 1/8 |
4 |
NA |
NA |
NA |
NA |
NA |
| - Low |
17 1/8 |
7 1/2 |
3 1/4 |
3 |
2 7/8 |
NA |
NA |
NA |
NA |
NA |
| P/E Ratio - High |
NM |
87 |
71 |
61 |
67 |
NA |
NA |
NA |
NA |
NA |
| - Low |
NM |
28 |
23 |
36 |
47 |
NA |
NA |
NA |
NA |
NA |
|
| Income Statement Analysis (Million $) |
|
1996 |
1995 |
1994 |
1993 |
1992 |
1991 |
1990 |
1989 |
1988 |
1987 |
| Revs. |
450 |
228 |
113 |
58.2 |
31.6 |
17.1 |
NA |
NA |
NA |
NA |
| Oper. Inc. |
112 |
56.2 |
29.0 |
14.4 |
8.9 |
4.4 |
NA |
NA |
NA |
NA |
| Depr. |
26.7 |
11.3 |
7.3 |
1.9 |
0.8 |
0.4 |
NA |
NA |
NA |
NA |
| Int. Exp. |
Nil |
Nil |
Nil |
0.0 |
0.1 |
0.1 |
NA |
NA |
NA |
NA |
| Pretax Inc. |
61.7 |
48.9 |
23.9 |
13.7 |
8.1 |
3.1 |
NA |
NA |
NA |
NA |
| Eff. Tax Rate |
42% |
40% |
39% |
39% |
40% |
38% |
NA |
NA |
NA |
NA |
| Net Inc. |
35.9 |
29.4 |
14.6 |
8.4 |
4.8 |
1.9 |
NA |
NA |
NA |
NA |
|
| Balance Sheet & Other Fin. Data (Million $) |
|
1996 |
1995 |
1994 |
1993 |
1992 |
1991 |
1990 |
1989 |
1988 |
1987 |
| Cash |
197 |
126 |
88.0 |
56.7 |
42.1 |
2.1 |
NA |
NA |
NA |
NA |
| Curr. Assets |
397 |
244 |
149 |
97.0 |
60.0 |
14.0 |
NA |
NA |
NA |
NA |
| Total Assets |
540 |
314 |
172 |
108 |
64.0 |
16.0 |
NA |
NA |
NA |
NA |
| Curr. Liab. |
287 |
156 |
78.0 |
35.4 |
15.7 |
8.2 |
NA |
NA |
NA |
NA |
| LT Debt |
Nil |
Nil |
Nil |
Nil |
0.3 |
0.4 |
NA |
NA |
NA |
NA |
| Common Eqty. |
253 |
157 |
93.3 |
72.1 |
47.7 |
1.3 |
NA |
NA |
NA |
NA |
| Total Cap. |
253 |
157 |
93.3 |
72.1 |
47.9 |
7.0 |
NA |
NA |
NA |
NA |
| Cap. Exp. |
18.3 |
53.2 |
18.2 |
5.8 |
2.1 |
1.2 |
NA |
NA |
NA |
NA |
| Cash Flow |
62.6 |
40.6 |
21.8 |
10.3 |
5.2 |
2.0 |
NA |
NA |
NA |
NA |
|
|
|
| Curr. Ratio |
1.4 |
1.6 |
1.9 |
2.7 |
3.8 |
1.7 |
NA |
NA |
NA |
NA |
| % LT Debt of Cap. |
Nil |
Nil |
Nil |
Nil |
0.5 |
5.7 |
NA |
NA |
NA |
NA |
| % Net Inc.of Revs. |
8.0 |
12.9 |
12.9 |
14.5 |
15.3 |
11.1 |
NA |
NA |
NA |
NA |
| % Ret. on Assets |
8.3 |
12.1 |
3.5 |
9.3 |
10.9 |
NA |
NA |
NA |
NA |
NA |
| % Ret. on Equity |
17.3 |
21.1 |
17.6 |
13.4 |
17.6 |
NA |
NA |
NA |
NA |
NA |
Data as orig. reptd.; bef. results of disc. opers. and/or spec. items. Per share data adj. for stk. divs. as of ex-div. date. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked.
Office--4440 Rosewood Dr., Pleasanton, CA 94588.
Tel--(510) 225-3000.
Website--http://www.peoplesoft.com
Chrmn, Pres & CEO--D. A. Duffield.
SVP-Fin, CFO, Secy & Investor Contact--Ronald E. F. Codd.
Dirs--A. G. Battle, E. F. Codd, A. W. Duffield, D. A. Duffield, G. J. Still, Jr., C. J. Yansouni.
Transfer Agent--Boston EquiServe, Canton, MA.
Incorporated--in Delaware in 1987.
Empl-- 2,867.
S&P Analyst: Peter C. Wood, CFA
This report is for information purposes and should not be considered a solicitation to buy or sell any security. Neither S&P nor any other party guarantee its accuracy or make warranties regarding results from its usage. Redistribution is prohibited without written permission. Copyright © 1997