Among them is BroadVision (BVSN), whose software helps e-tailers "personalize" their stores. Exploiting the Web's powers of persuasion, BroadVision tracks user activity at a site and presents targeted ads or services to him or her on the next visit. The Redwood City, Calif., company earned 8 cents a share in the fourth quarter on $16 million in revenue.
"I would love to be a salesman for BroadVision," said Bill Burnham, e-commerce analyst with Credit Suisse First Boston. "This is going to be a very valuable piece of software over the long run."
From the vantage point of a value investor, the stock isn't cheap, having run to about $45 from the single digits a year ago, before the target market caught up with the technology. Now the client list includes American Airlines, Cisco Systems, Kodak and Citibank.
Still, the stock trades at a price-to-sales ratio of about 22. Compare that to ticket vendor Ticketmaster Online-CitySearch, for instance, which carries a P/S ratio of 84.
To be sure, taking a position in a commerce enabler company--the expanding pack includes Digital River, Security First Technologies and Vignette, which went public only 10 days ago--is taking a hefty risk. Their sales cycles expose them to shortfalls in the final month of each quarter, and there's always the threat of their technology becoming obsolete.
But compared with the e-tailers, Burnham said, "they've got clearer near-term prospects. Right now, I'm more comfortable with their valuations."
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Virtual Value
Companies in an emerging industry such as electronic commerce tend to be judged more by the opportunity before them than their quarterly financial results. Because few pure Internet firms are profitable, investors sometimes gauge their value as a multiple of sales rather than earnings. Traditional retailers Gap and Office Depot have recently begun selling on the Net.
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Friday Analysts' Price- Ticker closing estimated EPS* to-sales Company symbol price for current qtr. ratio Office Depot ODP 36.00 0.39 1.1 Gap GPS 64.69 0.27 4.1 Preview Travel PTVL $20.38 --$0.45 16.5 Beyond.com BYND 26.00 --0.75 19.4 BroadVision BVSN 44.88 0.08 21.7
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* Earnings per share
Sources: Bloomberg News, Zacks Investment Research
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Times staff writer Edward Silver can be reached via e-mail at edward.silver@latimes.com.
