2008 | 2009 | ||||||
Price: | 1.10 | EPS | |||||
Shares Out. (in M): | 0 | P/E | |||||
Market Cap (in $M): | 123 | P/FCF | |||||
Net Debt (in $M): | 0 | EBIT | 0 | 0 | |||
TEV ($): | 0 | TEV/EBIT |
|
2000
|
2001
|
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
Revenue ($mn)
|
|
|
|
|
|
|
|
|
License
|
251
|
101
|
40
|
30
|
27
|
15
|
15
|
21
|
Service
|
165
|
147
|
75
|
58
|
51
|
45
|
37
|
29
|
Total
|
415
|
248
|
116
|
88
|
78
|
60
|
52
|
50
|
Revenue Growth
|
|
|
|
|
|
|
|
|
License
|
233%
|
-60%
|
-60%
|
-25%
|
-11%
|
-45%
|
3%
|
39%
|
Service
|
310%
|
-11%
|
-49%
|
-23%
|
-12%
|
-11%
|
-19%
|
-21%
|
Total
|
260%
|
-40%
|
-53%
|
-24%
|
-11%
|
-23%
|
-14%
|
-4%
|
Revenue Mix
|
|
|
|
|
|
|
|
|
License
|
60%
|
41%
|
35%
|
34%
|
34%
|
24%
|
29%
|
42%
|
Service
|
40%
|
59%
|
65%
|
66%
|
66%
|
76%
|
71%
|
58%
|
|
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
'08E
|
'09E
|
Revenue ($mn)
|
|
|
|
|
|
|
|
|
License
|
40
|
30
|
27
|
15
|
15
|
21
|
29
|
41
|
Service
|
75
|
58
|
51
|
45
|
37
|
29
|
23
|
18
|
Total
|
116
|
88
|
78
|
60
|
52
|
50
|
52
|
59
|
Revenue Growth
|
|
|
|
|
|
|
|
|
License
|
-60%
|
-25%
|
-11%
|
-45%
|
3%
|
39%
|
39%
|
39%
|
Service
|
-49%
|
-23%
|
-12%
|
-11%
|
-19%
|
-21%
|
-21%
|
-21%
|
Total
|
-53%
|
-24%
|
-11%
|
-23%
|
-14%
|
-4%
|
4%
|
13%
|
Revenue Mix
|
|
|
|
|
|
|
|
|
License
|
35%
|
34%
|
34%
|
24%
|
29%
|
42%
|
56%
|
70%
|
Service
|
65%
|
66%
|
66%
|
76%
|
71%
|
58%
|
44%
|
30%
|
|
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
'08E
|
'09E
|
Revenue ($mn)
|
|
|
|
|
|
|
|
|
License
|
40
|
30
|
27
|
15
|
15
|
21
|
29
|
41
|
Service
|
75
|
58
|
51
|
45
|
37
|
29
|
29
|
29
|
Total
|
116
|
88
|
78
|
60
|
52
|
50
|
58
|
70
|
Revenue Growth
|
|
|
|
|
|
|
|
|
License
|
-60%
|
-25%
|
-11%
|
-45%
|
3%
|
39%
|
39%
|
39%
|
Service
|
-49%
|
-23%
|
-12%
|
-11%
|
-19%
|
-21%
|
0%
|
0%
|
Total
|
-53%
|
-24%
|
-11%
|
-23%
|
-14%
|
-4%
|
16%
|
20%
|
Revenue Mix
|
|
|
|
|
|
|
|
|
License
|
35%
|
34%
|
34%
|
24%
|
29%
|
42%
|
50%
|
59%
|
Service
|
65%
|
66%
|
66%
|
76%
|
71%
|
58%
|
50%
|
41%
|
|
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
'08E
|
'09E
|
Revenue ($mn)
|
|
|
|
|
|
|
|
|
License
|
40
|
30
|
27
|
15
|
15
|
21
|
25
|
29
|
Service
|
75
|
58
|
51
|
45
|
37
|
29
|
29
|
29
|
Total
|
116
|
88
|
78
|
60
|
52
|
50
|
54
|
58
|
Revenue Growth
|
|
|
|
|
|
|
|
|
License
|
-60%
|
-25%
|
-11%
|
-45%
|
3%
|
39%
|
17%
|
17%
|
Service
|
-49%
|
-23%
|
-12%
|
-11%
|
-19%
|
-21%
|
0%
|
0%
|
Total
|
-53%
|
-24%
|
-11%
|
-23%
|
-14%
|
-4%
|
7%
|
8%
|
Revenue Mix
|
|
|
|
|
|
|
|
|
License
|
35%
|
34%
|
34%
|
24%
|
29%
|
42%
|
46%
|
50%
|
Service
|
65%
|
66%
|
66%
|
76%
|
71%
|
58%
|
54%
|
50%
|
|
Scenario One
|
Scenario Two
|
Scenario Three
|
|||
|
'08E
|
'09E
|
'08E
|
'09E
|
'08E
|
'09E
|
Gross Margin
|
|
|
|
|
|
|
License
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
Service
|
69%
|
69%
|
69%
|
69%
|
69%
|
69%
|
Gross Profit ($mn)
|
|
|
|
|
|
|
License
|
29
|
41
|
29
|
41
|
25
|
29
|
Service
|
16
|
12
|
20
|
20
|
20
|
20
|
Total
|
45
|
53
|
49
|
61
|
45
|
49
|
Incremental GP vs 2007
|
$4mn
|
$12mn
|
$8mn
|
$20mn
|
$4mn
|
$8mn
|
Subject | Moat? |
Entry | 03/27/2008 01:29 PM |
Member | Coyote05 |
Would you talk about the product? How is it superior to the offering of competitors? Thank you, VL | |
Subject | RE: Margin |
Entry | 03/27/2008 01:37 PM |
Member | sea946 |
I believe R&D spending of roughly $10 million per year has been and will continue to be sufficient going forward. However, in order to grow sales at any meaningful clip, they will have to invest more in sales and marketing. Management has talked about this, and I think the fear of major margin compression is a key reason the stock has declined so much. The company has stated it would be willing to accept a margin range of 15%-20% in order to boost top-line growth. I think a key driver for the stock going forward will be whether higher spending on sales and marketing actually translates into revenue growth. If it does not, then a margin range of 15%-20% would imply an EBIT decline of as much as 50%. I address this issue in more detail in the write-up (see section about Q4 earnings call). | |
Subject | Broadvision expectations |
Entry | 04/11/2008 03:01 PM |
Member | specialk992 |
Hello- I am new to this board but I own Broadvision stock, follow the company closely and keep my own model. I generally agree with you that BVSN is a high potential return investment with somewhat limited risk, but I don't agree with the revenue and earnings scenarios you lay out. I only expect $8M to $9M in EBIT this year and will tell you why. First, I don't think you can extrapolate the 39% license growth or anything close to it from last year to this year. As you note BVSN has under-invested in sales and marketing the last few years, and have added very few new customers. The growth from last year was a result of existing customers growing their usage of BVSN, but also of a license enforcement program where BVSN made sure customers were not using more SW licenses then they were entitled to. I think this program has been mostly finished so it will not contribute much to growth going forward. I also think it is going to take a while to ramp up new license sales. In the beginning I think the company is focused on upgrading existing customers to 8.1, and this should generate some new license sales as customers buy new capabilities. However they are starting from a cold start in gaining new customers- BVSN has to hire new sales reps, train them and send them out in a tough new license sales environment with a long sales cycle product. I don't expect the fruits of these efforts to show up until 2009. So I expect license sales to be anywhere from down a little to up a little. Services revenue will probably continue to decline as parts of the legacy customer base churn off. I also don't see a big increase in GM because as more of the services revenue is implementation work upgrading BVSN customers to 8.1 the cost of services might go up. I put all this together and see an 18%ish operating margin. Overall I think the re-acceleration of the company will take a while, but I own the stock because I think if successful the company could easily be worth 4-5x its current EV given its market opportunity and position, and even if Pehong is not successful re-igniting growth acquirers in the software space would be willing to pay at least 5x EV/maintenance revenue or $1.50 per share. Note that I don't think Pehong will consider selling any time soon because I think he wants to redeem himself by making BVSN a real company again, but that option is there if this plan does not work out. I want to be here because the valuation is low and I could be too pessimistic, but I just think this one is going to require patience. I will be delighted if one of your scenarios comes true. | |
Subject | RE: Broadvision expectations |
Entry | 04/11/2008 05:33 PM |
Member | sea946 |
specialk-- Thanks for your perspective. I agree that it's best to have modest expectations for '08 as the company ramps up sales and marketing. The purpose of my write-up was essentially to make the point that the sky is not falling at BroadVision, as seems to be implied by the fact that the stock ranks in the Top 25 cheapest companies in the entire U.S. equity universe based on the criteria used at www.magicformulainvesting.com. Statistically, stocks on that list should, on average, handily outperform the market, and I think BroadVision is one of the better companies on the list. |