Markets & Finance

Needham Cuts Commerce One to 'Hold'

Needham cut Commerce One (CMRC) to hold from buy.

On Friday, Commerce cut the Q2 guidance, and said SAP AG would pay up to $225 million for an increased stake in the company.

Analyst Richard Davis says he was looking for Q2 revenues of $158 million vs. the company's new guidance of $100 million to $120 million. Therefore, he cut the $650 million 2001 revenue estimate to $485 million and cut the $816 million 2002 estimate to $519 million.

Davis says there's a possibility that SAP's cash infusion was a precursor to an acquisition and was most likely the impetus behind an uptick in Commerce One's shares on Friday. While he believes such a combination would be favorable to Commerce holders, he's not prepared to say a buyout is on the immediate horizon. He says at current levels, the stock is probably a third higher than what it should be.

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