Bad public relations??Creo's problems lie not with their business, which hasn't changed. They are industry leaders and will continue to be. They need to be more confident with their public statements. Their last numbers were excellent yet their press release did not inspire confidence. Here is the conclusion reached by Nesbitt.(they also said they reduced their earnings estimates from 1.42 to 1.41.....ONE penny!!)
CONCLUSION: We continue to be optimistic as to Creo’s growth prospects; although, we admit it is difficult to be
confident in the absence of revenue guidance from management. We have, in effect, been left to navigate by dead
reckoning or by using our last reference point as the basis for our forecast, subject to the aforementioned adjustments.
This situation is one which tends to result in lower valuation multiples. Due to this and a general decline in valuation
multiples, we are reducing our price earnings multiple from 32x to 28x our fiscal 2001 earning estimate, which yields a
revised target price of $40, down from our earlier target of $45. This is a high-risk investment, and we expect continued
volatility in Creo’s share price, at least until more information is available regarding the outlook for the firm.