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Technology Stocks : INSS - International Network Services
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To: Peter Moyer who wrote (15)10/8/1996 2:37:00 PM
From: Trevor Goodchild   of 446
 
Peter
I'd be very worried about this stock's ability to maintain this price level. The day it went public, more shares were traded then were actually available. Even now, the price is being run up because so few shares (2.5 Million)are available to buyers. The market cap for this company is over a billion already, and that's for about 350 billable engineer/consultants. That's about $3 million per engineer (valuation not revenue). Assuming a profit margin of 50% per engineer, each engineer would still have to bill $6 million a year to justify this valuation. Assuming 2000 hours a year, that's a billing rate of $3000/hour.

Since INSS' revenue is only $44 Million, I'm hard pressed to see the billion plus valuation.

When your only assets are your engineers, and their ability to bill at high rates to short term contract vehicles...
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