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Technology Stocks : NetSolve, Incorporated (NTSL)
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To: Feraldo who wrote (82)10/26/1999 11:28:00 AM
From: Lane Hall-Witt  Read Replies (1) of 92
 
Well, the safe answer is: I don't know. The answer I have put my money behind is: I would think so. The company has experienced continued growth this quarter and has recently been in a trend where network-management margins are going up as the company "plugs in" more clients. Gross margins for the network-management business have improved from 29.3 percent (1Q1999) to 41.7 percent (1Q2000) over the past fiscal year. NTSL netted $1.901M last quarter alone, which is $0.14 per currently outstanding (not diluted) share. I'm still scratching my head over the BBRS revenue estimates, which appear way too low and make me wonder if I'm missing part of the story.

This is an estimate that I posted on Yahoo! a few days ago:

messages.yahoo.com

My back-of-the-envelope numbers are about the same: $11-12M total revenues and $1.7-2.1M net income (EPS 12-16 cents, based on # of outstanding shares). I'm making some assumptions that I admit are shaky:

(1) I assume NTSL will continue claiming the tax credits they're due;

(2) I assume marketing and sales expenditures will be more or less in line with historical norms;

(3) I assume capital expenditures will be more or less in line with historical norms.

I think (1) is a fairly safe assumption; (2) and (3) are hard to tell, because the company may have decided to spend aggressively in these areas after the infusion of cash from the IPO.
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