Cisco Systems, Inc. (CSCO) Message Board

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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 73.11

+0.3%

Oct 31 9:30 AM EST

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To: Jacob S. Rosenberg who started this subject	8/22/1995 11:06:00 AM
From: Jeff Dryer	of 77397

Cisco does appear to have a rich valuation. CSCO sells for about 8 times this year's sales, whereas, 3COM sells for about 4 times sales. I was surprised to find that Cisco just reported over $500 million in revenue for the latest quarter with better than 20 percent net profit margins. The company and its stock price are growing fast! Business Week (August 28 issue) mentions Cisco as a stock "up nearly 29 times- in less than six years." Wow! Later on in the article, an analyst explains that Cisco and other networking stocks such as 3COM and Bay Networks sell at P/E multiples at or less than their growth rate. So, their valuations are not unreasonable. The big question: Can Cisco and other networking stocks continue to report earning's growth of 30% plus per year for the next several years? With the growth of the Internet and the World Wide Web, maybe so.

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