Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Businessweek Archives

Fixing Glitches At A Software Star

Inside Wall Street


The saga of Project Software & Development (PSDI) has a familiar ring: A hot-growth company slips up, disappoints the Street at earnings time, and gets punished by investors. Project Software, whose output is used for managing factory operations, paid a high price for its errors. In just one day last year--Apr. 2--the stock tumbled from 31 to 15. It then fell further, to 11, ran up to 26 this year, and now trades at 21. Some pros insist the stock is destined to go higher.

One reason: Founder Robert Daniels, who holds 20% of the stock, recently took the reins from David Sample, the CEO who had succeeded him in 1996. "The board felt Sample wasn't aggressive enough in expanding the business," says analyst David Settle at brokers Loewenbaum & Co. He rates the stock a "strong buy."

Settle says the company has corrected the management problems that led to the last earnings shortfall, adding that sales are growing as fast as before the nosedive. He estimates that the company will earn $1.50 a share in the next year, which gives it a price-earnings ratio of 14--low for an enterprise software company. The p-e drops to 10 if you take out the $5.50 a share in cash on the debt-free balance sheet.

One New York takeover player has been buying, betting that Daniels is getting the company ready to sell. Settle doesn't rule that out, but he says Project Software is attractive on its own merits, with a p-e only half its growth rate. His 12-month price target for the stock is 36.By Jeffrey M. LadermanReturn to top

Return to top

blog comments powered by Disqus