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Technology Stocks : America On-Line: will it survive ...?
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To: yard_man who wrote (3487)6/18/1997 6:36:00 PM
From: Harry Larson   of 13594
 
The table below shows that on asset and cash flow basis Compuserve
compares very favorably versus AOL. In fact better in many key
respects. On a financial basis, the huge gap in market valuations
(AOL 7.4x CSRV) says that Compuserve is undervalued and/or that AOL
is overvalued.

And bear in mind that most of AOL's balance sheet items reflect the
one-time Tel-Save $100m payment (as noted).

Normally, numbers talk and bs walks. With AOL it's the reverse.

millions except
ratios and per share amounts
Quarterly Data

CSRV AOL CSRV AOL
04/30/97 03/31/97 01/31/97 12/30/96
Market Cap 6/18 $929 $6.9b

Price/Sales Ratio 6/18
(4x current Q sales) 1 3.8 1 2

Gross Margin 40% 36% 36% 40%

Current Assets/ 3.3 0.18 t 3.3 0.61
Current Debt

Working Capital $267 ($163) t $270 ($193)

Property & Equip,net $355 $127 $366 $112

Shareholder Equity $651 $70 $670 $ 38**
Per Share $7.03 $0.61 $7.23 $0.40**

Cash+st investments $161 $197 t $176 $130
Per Share $1.74 $1.72 $1.90 $1.38

EBITDA/share* $0.13 $0.14 $0.06 ($0.67)
FREE Cash Flow/shr* $0.46 $0.48 ($0.37) ($2.18)

*excluding non-recurring items
except AOL $24m refund charge
(AOL booked associated revenue
above the line)

** includes: $19m/$0.20/share increase in Goodwill Q2
t includes: $100m Tel-Save payment in cash and
$12m difference in current asset ratios and
working capital due to accrual of $12m in Q3
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