Despite what people say about financial analysts and their (in)ability to read the tea leaves, it makes one always feel great to hear good news about the value of one's company. In a recent 12-page
research report (PDF), investment firm Sagio stipulates that Palm company is a bargain with hidden beauties. Their reasons are varied:
- Based on their valuation model, P/E is below 10
- PDA business is still very profitable and Palm is gaining market share (according to Garter this month, Palm sold 36% less handheld yoy, and market share declined to 13.9% (26.2% last year))
- Palm has innovation edge -> first hdd-based PDA (LifeDrive) (under the assumption that the Sharp Zaurus never existed)
- Palm has a "quasi monopoly" on Palm OS handhelds (is that a good thing? is that why they've just announced their first WM Treo?)
- Palm is closing in on smartphone business only behind RIMM and Nokia
- Palm is growing faster than the overall market
- Treo 650 is leading smartphone today (let's forget about the BlackBerry for a moment)
- Demand for "data enabled devices" will grow tenfold by 2008
- Microsoft-Palm "Treo 700" deal will help Palm to gain market share in Europe
- Push e-mail technology may soon become available to Palm (too bad Nokia just snatched away Intellisync)
- Palm has a promising product pipeline (some more insight please? Few details are known)
- Next-gen Treo "Hollywood" to be introduced in May 2006 (now, that's valuable insight!)
- Analysts are wrong, because of: incorrect estimates on Treo sales, wrong margin estimates