PAIR-NEWS ONLY!!!!! Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : PAIR-NEWS ONLY!!!!!

Public Reply Prvt Reply Mark as Last Read File

Next 10PreviousNext

To: margin_man who wrote ()	9/14/1997 12:10:00 PM
From: Sector Investor	of 73

PAIR: PAIRGAIN ON TRACK TO BEAT OUR THIRD QUARTER EPS ESTIMATE 08:16am EDT 11-Sep-97 UBS Securities (Nikos Theodosopoulos (212) 821-695) PAIR UBS SECURITIES EQUITY RESEARCH September 11,1997 Nikos Theodosopoulos (212) 821-6951 Anton Wahlman (212) 821-3675 PAIRGAIN TECHNOLOGIES (PAIR-OTC) PAIR: PAIRGAIN ON TRACK TO BEAT OUR THIRD QUARTER EPS ESTIMATE RATING HOLD ______________________________________________________________________________ Price 28.19 \| EPS P/E 52 Week 43.25-14.63 \| 12/1996A 0.49 57.5 Dividend Nil \| 12/1997E 0.63 44.7 Yield Nil \| 12/1998E 0.75 37.6 Shs. Out 74.7 Mil. \| Market Cap. 2.1 Bil. \| 3Q EPS Est. 0.14 vs. 0.12 last year ______________________________________________________________________________ * PairGain appears on track to exceed our estimate for the quarter * Unit growth in core HDSL business stronger than expected * PG-Flex also appears a bit stronger than expected * Given current valuation, maintain Hold Update On PairGain PairGain appears on track to beat our estimate for 3Q97 of $0.14. The better than originally expected results are due to stronger unit growth in the core HDSL business and slightly better than expected sales for the new PG-Flex product. Specifically, we believe that overall core HDSL revenues will be flat to modestly higher from 2Q97 even with 10% sequential declines in unit prices. Sequential unit growth is probably going to be over 10% or about 33%-40% on a year over year basis. We originally thought HDSL revenues would be down sequentially in 3Q97 given 10% price declines and sub-10% sequential unit growth. In addition, we believe that the PG-Flex will slightly exceed our $3M estimate for the quarter. The company now is shipping to three RBOCs which we have already disclosed in print before. We expect additional RBOCs to purchase the product in the coming quarters. The net result of these improving fundamentals is that the company will most likely exceed our $0.14 estimate and probably report a flattish EPS quarter from the $0.16 reported in 2Q97. The quarter also appears fairly linear and we would expect AR DSOs to remain in the normal range for the company of 35-45 days. We continue to believe, however, that the company has achieved peak profitability which will require revenue growth as the main driver for earnings and upside surprise in the future. While the company fundamentals have improved significantly from last quarter, the stock probably fully reflects this improvement. We maintain our Hold rating given the current valuation of 37.6x 1998 earnings. Realizing that our 1998 estimates will probably be raised after this quarter is reported, the stock probably reflects most of this expected earnings adjustment. UBS Securities LLC makes a market in this security.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Next 10PreviousNext