C-Cube Message Board - Msg: 670158

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Technology Stocks : C-Cube

CUBE 36.64

-0.5%

3:59 PM EST

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To: robt justine who wrote (8466)	1/16/1997 8:18:00 PM
From: robt justine	of 50808

From my above post last week.... <<Solid 4Q numbers include gross margins remaining in the 50% area, operating margins in excess of 25%, revs comfortably north of $100mm, net income north of .44/sh, and inventories comfortably below the $32mm reported as of 9/30/96.>> As just reported.... Gross margins 56% !! Operating margins 27% !! Revenues $95.5mm Net Income .45/sh !! Inventories $28mm !! This, I believe was an excellent quarter! CUBE closed the year with an overall 90+% of the VCD market. And VCD is actually dropping as a percentage of total revs. The higher margin products are starting to move up as a percentage of total revs. Plus manufacturing efficiencies are dropping cost of goods and raising gross margins. Net margins remain at 18% as more money is funneled (with no bottom line deterioration) to the R&D effort. Balkanski, I believe, is sending out the message that net growth can be sustained through '97 at the same rate of the last few quarters (ie, 11%-13%). This is an annualized growth rate of 57% with a dynamically improving balance sheet. Is a 35x multiple too high for a company of this caliber that is about to ramp into a huge '98? I don't think so. I think 2.30/sh is easily doable in '97. With a 35 multiple look for a target of 80.

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