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Technology Stocks : Wind River going up, up, up!
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To: w2j2 who wrote (7370)3/3/2000 11:26:00 AM
From: Don Lloyd  Read Replies (1) of 10309
 
wj -

[[JS: Exactly right. Look at the revenue growth over the last 3 quarters: 21.5%, 12.6%, 19.7%. That averages 17.9% per quarter, or better than 72% per year. St. Dennis should be comfortable with 30% growth! :) wj]]

If you listen to the conference call, you will hear confirmation that there is a strong seasonality to WIND's results which is why any Q1 will tend to be lower than Q4, with a -17% sequential result before the 3 quarters you quote. No well established, dominant company like WIND is going to grow at 72%. In the current Q, there will be no new Q1 WIND-only report to make a direct sequential comparison.

It is also apparent that a significant part of the revenue growth going forward is expected to come from strategic acquisitions in the CSCO and AMAT mold.

The ENTIRE problem with the Q4 report is unrealistic expectations. Investors, using the term very loosely, do not realize that earnings estimates need to be separately analyzed from company to company. There is a world of difference between a large company with dozens of analysts competing to fine tune their numbers by talking to management every week, and a smaller company like WIND where the numbers are rarely updated for months at a time and the few analysts that cover the stock have other, higher profile companies to deal with to try to augment their reputations.

All current WIND shareholders have a cost basis of 66 1/8 or below. A company growing at 30% or more into the future will make every one of those shareholders profitable, with the only question being what time rate of return will be realized.

Regards, Don
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