Analysts Give Mixed Signals on Excite@Home Prospects

Investors in Excite@Home Corp. (ticker symbol: ATHM) debating whether to sell, hold or buy more after the stock’s 58% collapse this year got mixed signals from analysts who revised ratings Thursday.

Michael Wallace of Warburg Dillon Read upgraded the stock, the fourth-worst performer in the Nasdaq 100 index this year, to “strong buy” from “buy.” But Michael Graham of BancBoston Robertson Stephens cut his rating to “long-term attractive” from “buy.”

On Wednesday, the company, which provides high-speed Web access through cable TV lines, said it expects operating losses in 2000 of 25 cents to 30 cents a share because of international investments and higher marketing and network costs.

“Yes, the stock has been a disappointment,” Wallace said in a note to clients. “But this is the No. 1 broadband company, backed by AT&T; [Corp.], and we estimate profits next year.”

Excite@Home, 26% owned by AT&T;, also reported a first-quarter loss of a penny a share after the market closed Wednesday.

The shares fell $2 on Thursday to a 52-week closing low of $17.94.

Both analysts say the increased spending to build brand power and product quality will send the stock higher.

The difference lies in how soon each believes investors will react favorably to the company’s profit potential.

Wallace sees the stock more than doubling to $45 within 12 months, but Graham expects the recovery to take a little longer.

“Investors may not reward this position in the near term,” he said. But it may be “poised to work higher” in two to three quarters.

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Not Much Excitement

Excite@Home shares have plunged 79% from their peak last spring and 58% this year as investors have pummeled many Internet stocks. Weekly closes and latest on Nasdaq:

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Thursday: $17.94, down $2

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Source: Bloomberg News