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By Mara Der Hovanesian Although corporate info-tech spending has fallen off a cliff, Quest Software (QSFT
) is hanging tough. Its products help companies monitor B2B networks. Quest announced record results for the first quarter ended Mar. 31: revenues of $63 million, up 120% from a year ago and up 13% from the prior quarter. Earnings of 6 cents a share surprised Wall Street and catapulted the stock, trading at a 52-week low of $14.60 on Apr. 4, to its current $35--admittedly a far cry from the $97.50 it hit before the tech wreck. Quest still commands a pretty premium, but Ed Bierdeman of Moors & Cabot Tech Research Group says Quest deserves special valuation: "It's young, and it's growing 100%-plus in revenues," he says. Bierdeman has raised his earnings estimates to 30 cents a share this year and 47 cents in 2002. His 12-month price target: $60.
Quest's revenues stem from license sales and maintenance fees. And, adds Morgan Stanley Dean Witter's Joseph Farley, its product line is "crowding out the competition"--namely NetIQ and Precise Software Solutions. Since its 1999 initial public offering, Quest has gobbled up firms to grow. Still owned 69% by insiders, it has other things going for it, says Farley: a strong balance sheet and widening operating margins. Gene Marcial is on vacation.