No. of Recommendations: 4
If you have gotten used to my reports breaking your upload system this will make you happy. If you however need a complete KARB Report this may be deficient. I give you what I can....for eg I must have understood the growth metrics when I did BEAS but I can't remember what each one of the sub sets means....I gave it a shot...seems with the revenues VRTS is posting it will score high.

I also am going to cheat by combing a bunch categories to begin with and let the Fool speak on them.

Bottom line...if it wasn't for the numbers effected by Veritas buying Seagate to sell off the disk drive but to repurchase its stock which was 80% of Seagates value....VRTS would probably be an RM where it is listed in the initial KARM KARB candidates list. I think this stock is competitive or better to EMC and NTAP and should be in the port

A. Top dog, first mover, in an important, emerging industry that is currently in the Tornado (hypergrowth), or is in the early stages of Tornado/hypergrowth growth. (Most of the signs of Tornado formation/growth as laid out in the Gorilla Game FAQ must be met; refer to item #12 in this post:

B. Sustainable advantage gained through business momentum, patents, visionary leadership, high barriers to entry, and high switching costs.
"D. Clear signs of solid execution by a strong management team; Value chain in place or shows clear signs of developing (eg. alliances, joint ventures, partnerships, signing up distributors, third party developers, and VAR's)"
"E. Company products and brand name are well recognized and respected by its customers, peers, competitors and partners in the relevant industry."

What the Next Microsoft Will Look Like
By John Del Vecchio (TMF Fuz) and Mike Trigg (TMF Tonto)
December 4, 2000

While EMC (NYSE: EMC) and Network Appliance (Nasdaq: NTAP) garner plenty of attention, the fastest-growing independent software firm in this space is Veritas Software (Nasdaq: VRTS). In its most recent quarter, Veritas grew revenue by 73%, far outpacing the competition. Veritas is well-positioned to benefit from the shift toward storage, and management believes that it can sustain a 50% growth rate over the next three to four years. Veritas has breadth in its product line, and is not tied to a proprietary architecture, making it a primary choice for companies implementing storage solutions. As its mind share and market share continue to grow, Veritas could become the Microsoft of the storage networking revolution. (The Motley Fool examines the network storage market in Industry Focus 2001.)

Software 2001 Roundtable
By Motley Fool Staff
December 12, 2000
TMF Fuz: Well, he's right. Wall Street is still behind the curve on storage. Veritas (Nasdaq: VRTS) continues to blow away estimates and the Street has not caught up... yet.

TMF Tonto: At a $50 billion market cap?

TMF Fuz: I know, it's surprising. But the company manages earnings expectations very well. It continues to exceed those expectations, and furthermore it is capturing market share at a rapid rate which makes it difficult to model exactly what their revenue should be.

TMF Max: Well, it's true, I think, that the market does not estimate or value hypergrowth very well -- though that works both ways. The market can both dramatically overvalue and undervalue hypergrowth. Mike, you were looking at another relatively immature software industry that is still going through hypergrowth. What's the outlook for security software companies?,/i>

Storing the Information Economy's Assets

Storage: A Look at SANs
By John Del Vecchio (TMF Fuz)

Leaders emerge in the storage space
As many of the issues slowing SAN adoption are addressed over the next 12 to 24 months, the pace of adoption will increase rapidly. The stock market has taken notice of the need for storage, and investors have rewarded leaders in the storage space with large market capitalizations. EMC (NYSE: EMC) is a leader in high-end storage systems, with $6.7 billion in sales and a $168 billion market cap. IBM (NYSE: IBM) has made waves with its Shark storage system, and companies such as Sun Microsystems (Nasdaq: SUNW), Hitachi (NYSE: HIT), and Compaq (NYSE: CPQ) are vying for a piece of this lucrative pie. Brocade Communications (Nasdaq: BRCD), with 80% market share and revenue growth exceeding 400%, has emerged as a dominant player in Fibre Channel switches. On the software solutions side, Veritas Software (Nasdaq: VRTS) is staking a lead.

Based on even the most conservative estimates of market researchers and the various storage players themselves, the storage market will remain explosive and market demand for SANs will likely outstrip forecasted growth. This could create tremendous upside for savvy Fools over the next couple of years.

Yahoo Profile - Veritas Software Corp. (NasdaqNM:VRTS)

Business Summary
Veritas Software Corp. is an independent supplier of storage management software. The Company's products help to improve the levels of centralization, control, automation and manageability in computing environments. More specifically, the Company's products offer protection against data loss and file corruption, allow rapid recovery after disk or computer system failure, enable IT managers to work efficiently with large numbers of files, and make it possible to manage data distributed on large networks of computer systems without harming productivity or interrupting users. In addition, the Company's products provide continuous availability of data in clustered computer systems that share disk resources. The Company develops and sells products for most popular operating systems, including versions of UNIX and Windows NT. The Company also provides a full range of services to assist its customers in planning and implementing their storage management solutions.
Financial Summary
VRTS designs, markets and supports enterprise data storage management solutions, providing storage management software for protection against data loss and file corruption, efficient file processing and network back-up. For nine months ended 9/00, revenues rose from $370 million to $837.2 million. Net loss increased 49% to $494.8 million. Results reflect higher market acceptance of Co.'s software products, offset by increased amortization of goodwill and other intangibles.

Link to home page

The Motley Fool's Rule Maker Ranker
Version 3 -- Updated June 2000

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(Please read all three of these competitor comments.)
Financial Analysis Company Being Evaluated Competitor #1 Competitor #2 Competitor #3

<Fill in Company Name> <Fill in Name> <Fill in Name> <Fill in Name>
Current Period Year-ago Period Year-over-Year Current Period Current Period Current Period
<Date> <Date> Growth <Date> <Date> <Date>
Income Statement
Sales 837,247 369,953 126.3%
Cost of Goods Sold 89,418 36241 146.7%
Net Income -494,830 ($332,322) N/A
Shares Outstanding 399,655 292,115 36.8%

Balance Sheet
Cash & Equivalents 948,578 643,391 47.4%
Current Assets 1,173,830 4,337,160 -72.9%
Short-term Debt 0 0 No Debt
Current Liabilities 315,398 199,823 57.8%
Long-term Debt 459812 448188 2.6%

Cash Flow Statement
Operating Cash Flow 237,670 108,877 118.3%
Capital Expenditures 83,064 23,670 250.9%
0 0 0
Margins & Ratios . . . Competitors' Average
Gross Margins 89.3% 90.2% -0.9
Net Margins -59.1% -89.8% 30.7
Cash-to-Debt 2.06 1.44 43.7%
Net Cash 488766.0 195203.0 150.4%
Fool Flow Ratio 0.71 18.49 -96.1%
Cash King Margin 18.5% 23.0% -4.6

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Ranking Rule Makers

1) Brand Points (0-1) 3) Financial Direction Points (0-3)
Familiarity 1 Sales Growth 3
Openness 1 Gross Margins 2
Optimism 1 Net Margins 3
Legitimacy 1 Shares Outstanding 0
Inevitability 1 Cash-to-Debt 2
Solitariness 1 Fool Flow Ratio 3
Humor 1 Expansion Potential 3
Subtotal 7 Subtotal 16

2) Financial Location Points (0-2) 4) Monopoly Status Points (0-4)
Mass Market Habit 2 Gross Margins
Gross Margins 2 Net Margins
Net Margins 0 Net Cash
Cash-to-Debt 2 Fool Flow Ratio
Fool Flow Ratio 2 Convenience
Your Interest 2 Subtotal 0
Subtotal 10
5) Your Enjoyment 1

Total Score 34

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Want to modify this sheet?

"C. Excellent Growth Metrics"

Point system (maximum points = 8, we would prefer 5 or better)

Relative strength
> 90 --> 2 points
80 - 90 --> 1 point
< 80 --> 0 points 77 0 point

Year over year sales growth 126% 2points this is from the RM Ranker?
> 100% --> 2 points
80 – 100% --> 1 point
< 80% --> 0 points

quarter over quarter sales growth
> 100% --> 2 points
80 – 100% --> 1 point
< 80% --> 0 points

sequential quarterly sales growth
> 10% --> 2 points 2 points 15.2%
5 – 10% --> 1 point
< 5% --> 0 points

"F. Valuation metrics: "

-> f) Valuation metrics:

MktCap < 20 Billion (room for it to quadruple over 5 years) 48 billion
P/E > 100 N/A
P/S > 10 35.49

Benjami aka omahafool
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