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Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 101.61+2.8%Dec 5 9:30 AM EST

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To: Gary Wisdom who wrote (8752)10/17/1998 1:56:00 PM
From: MileHigh   of 93625
 
Gary,

Gross margins are one thing, and yes they are currently running at approx. 73%, but I am talking "Net" Income which you use to derive EPS.

Current "Net Income" Profit Margins are running at 18-18.5%. I used an increased Profit Margin of 20-25% in FY '99 realizing that margins will, in fact, increase as they do not manufacture anything. Also, Harmon thinks profit margins could equal 40% after the ramp is achieved.

Gross margins are great, but you take Net to the bank (add back your depreciation expense and other non-cash expenses)

MileHigh
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