But they are growing at 80% + and have 50-55% Margins. They are just starting in a bunch of divisions. They are in the heart of Communications biz. This is an infant, you can buy it now or wait till it becomes a Gorilla. I getem when their young. Here is the last report from Feb:
SAN FRANCISCO--(BUSINESS WIRE)--Feb. 18, 2000--Robertson Stephens Managing Director and Senior Communications/Networking Analyst Paul Johnson today reiterated his Buy rating and raised estimates on Ditech Corporation (NASDAQ:DITC), after the company reported strong fiscal third quarter results. Ditech, based in Mountain View, Calif., develops and markets an extensive family of broadband echo cancellation solutions that enable high-quality voice communications as well as cost-effective Wavelength Division Multiplexing (WDM) implementations.
"We are reiterating our Buy recommendation on Ditech, after the company reported revenues of $34.4 million and earnings-per-share of $0.41, well above our estimates of $30 million and $0.32, respectively," said Johnson. "The upside surprise in revenues in the quarter was driven by accelerating market acceptance of the company's new family of broadband/quad Echo Cancellation products, the remaining shipments against a large one-time contract from Qwest Communications and the first material revenue contribution from the company's optical amplifiers."
"Ditech announced that it added eight new customers in the quarter," said Johnson. "Ditech's management is very confident in Optics products producing revenues of $8-$10 million during the current fiscal year, implying fourth quarter shipments of $4.0-$4.5 million."
"As a direct consequence of the strong financial performance during the quarter, we are raising our fiscal 2000 and 2001 estimates quite dramatically, in our view," said Johnson. "Our 2000 revenue and earnings-per-share estimates increase to $109.2 million and $1.19, from $82.3 million and $0.81, respectively. In addition, we are increasing our 2001 revenue estimate from $103.0 million to $157.5million and our earnings-per-share from $0.92 to $1.42."
These are estimates which DITC will beat IMHO. I will bet on a co with 53% margins everytime |
