eToys Inc. (ETYS) Message Board

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Technology Stocks : eToys Inc. (ETYS)

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To: Rajiv who wrote (618)	8/12/1999 8:25:00 PM
From: gtc123	Read Replies (1) of 1330

Rajiv, Again, I think your P/S analysis is a little biased. First, you can't take eToys quarterly revenue to base a judgement simply because their sales are so weighted towards the 4th quarter. I think 90%+ of their revenues last year were from 4th quarter sales. I'm not saying it's going to be the same this year, but if you took a market cap/annual revenue figure, it wouldn't be as crazy. OnSale is more a b2b auction exchange. eToys is a b2c e-catalog company. Two different models. You're saying ONSL trades at 4x revenues. I'm saying that other leading b2c e-catalog companies trade at 10x-20x revenues. And, I do think you have to say that eToys is one of the top tier e-commerce companies out there simply because it was the #5 site (not retailer) on the web last Christmas, and it has tremendous brand name recognition with consumers. I agree with you that gross margin and revenue growth rate should be considered. In that regard, clearly eToys revenue growth rate is spectactular. And, their gross margin hovers close to 20% which is very solid (ONSL is 10%). eToys is clearly going to invest a lot into winning this Christmas. I think it could be a very interesting (if not positive) few months...

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