Stock Watch: ‘Critical’ Strays from Path Despite Strong Indicators

Amid a general sell-off of technology shares, Critical Path, Inc. (Nasdaq: CPTH) fell 7 3/16 to 37 15/16 Monday — despite better-than-expected first-quarter results and a repeated buy recommendation from an analyst.

The B2B software maker said revenue for the quarter rose to $24.6 million from $1.05 million in the same quarter last year. The company lost $16.8 million, or 33 cents a share, before special charges, compared with a loss of $5.4 million, or 77 cents, in the year-earlier quarter. Analysts surveyed by First Call expected the company to lose 41 cents a share.

Gross margin also improved, rising to $9.2 million from $1.5 million.

Robertson Stephens analyst Rick Juarez repeated a strong buy recommendation on the stock and raised revenue and earnings estimates for the year, citing “better-than-expected first-quarter results and accelerated synergies of recent acquisitions.” Juarez said he expects the company to lose 88 cents a share for the year as a whole, on revenue of $132.2 million. In 2001, he predicts the loss will narrow to 17 cents as revenue rises to $232.2 million.

“Critical Path has assembled the components that could lead to one of the most powerful and disruptive ASP models in the industry,” Juarez said. “The company’s comprehensive platform could, in our opinion, represent a formidable challenge to traditional physical document delivery and transport carriers.”

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