Take the High Road with @Road

04/04/2003 12:00 am EST


Andrew Seybold

Editor-in-Chief, Forbes/Andrew Seybold's Wireless Outlook

"It's hard these days to find wireless companies with clean balance sheets and improving financials; but when you do the current market malaise offers an opportunity to snap up these stocks at bargain prices," says Nikhil Hutheesing, executive editor under Andrew Seybold at the exceptionally sophisticated and well researched Forbes/Andrew Seybold's Wireless Outlook. Their latest pick takes us out for a road trip.


“We think At Road (ARDI NASDAQ)), also know by the tech moniker @Road, meets this description. The stock is up from $3 a share in July , but down from a high of $9 in March. Even so, the company had a terrific year in 2002, increasing its subscriber base by 36,000 over the prior year to 90,000 subscribers. Total revenue increased from $27.5 million in 2001 to $44.4 million in 2002, while service revenue rose 67%. The firm also increased its cash position to $37.9 million, a far cry from the fourth quarter a year earlier when it had a $5.4 million cash burn.


“Ironically, much of At Road’s success is thanks to the difficult economy and the pressure on companies to cut costs while making employees more productive.  And that’s what At Road’s technology claims to do. Last year, Verizon, Waste Management, and Qwest all signed up for At Road’s mobile resource management (MRM) services. This is a combination of global positioning satellite, wireless, and Internet technology. 


“This allows them to use the Web site to monitor the activities of their employees, vehicles, and goods and services. It also provides two-way messaging between their customers and mobile workers. So these corporate customers can transmit information such as signature verification and forms processing while in the field.  At Road also installs unit-to-pick-up location information on customer trucks. Verizon, for example, has some 20 and there is a fee for the service. As a result, instead of making huge capital investments, the firm relies on building its networks through revenues from its source management operations. As  result, in its fourth quarter the company reported grow margins of 64%


“Krish Panu, At Road’s chief executive, expects 2003 to be a banner year. He looks for revenues to increase to 65%-75%, reaching breakeven in the third quarter. He also looks to increase the subscriber base by 50%.  Of course, Panu will have his wok cut out for him, as the company still has numerous concerns.  Despite these concerns, At Road should do well this year. And if the stock market turns around, the stock stands to do even better. We recommend buying these shares.”

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