VRST
- (recommended
to subscribers
on 6/20/04)
BOUGHT
at $6.00 SOLD
at $11.52
On
April 26th 2004 Verisity, a
provider
of proprietary technologies and software products used to verify
designs
of electronic systems and complex integrated circuits, reported 1st
quarter
2004 revenue of $11 million which compares to $11.7 million in the 1st
quarter of 2003. On a GAAP basis net loss was $2.2 million or 10 cents
per share. On a non-GAAP basis net loss was $1.0 million or 4 cents per
share. The non-Gaap results exclude non-cash charges related to the
company's
recent acquisition of Axis Systems which helps broaden Verisity's
product
offering.
In the 1st quarter
35% of
revenue came
from outside of North America. Gross margins were 92% in the 1st
quarter.
In 2003 two customers contributed more than 10% of total revenue. The
largest
customer was responsible for 12% of total revenue and the 2nd largest
was
responsible for 11%.
Verisity expects
revenue
for the 2nd quarter
to be between $13.3 million and $13.7 million with a non-Gaap loss of
4-5
cents per share. The company expects full year 2004 revenue to be
between
$56 million and $58 million with a non-GAAP loss per share between 7
and
11 cents. Based on the guidance the company expects an improved 2nd
half
for revenue and earnings per share when compared to the 1st half of
2004.
Verisity has $55.1
million in cash and
investments or $2.34 per share. Book value is $1.43 per share and the
company
carries no debt. Verisity has a price-to-sales ratio of 2.5 which is
low
for a company with extremely high gross margins. The company has
historically
traded at a higher multiple. Verisity also trades at a discount to it's
competitors.
Above is a 1 year
chart
of VRST. Since
February 2004 the stock has been in a decline. On Friday VRST broke
above
the downtrend line drawn below.
1/14/05
- SOLD
AT $11.52 FOR A GAIN OF 92%. DURING THE SAME TIME PERIOD THE NASDAQ WAS
UP 5%.
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