Cisco Systems, Inc. (CSCO) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 73.99

+3.1%

3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Pullin-GS who wrote (33117)	3/30/2000 3:03:00 AM
From: Kashish King	Read Replies (4) of 77398

Parabolic Action I can't see faulting CSCO in terms of product, direction, marketing or anything else for that matter. The revenues speak for themselves, as do the profits. What's there to complain about? The problem I have is with general market ignorance regarding technology. What people don't realize is that the commoditization of the router is just around the corner and these boxes are far less sophisticated in design than a $99 PC motherboard. Cisco has its hands in plenty of other pies but the competition is getting tight. My guess is this top-notch company will continue its ride at the front of the pack, but the other teams are closing the gap: Nortel, Lucent and dozens of others. Enough about the company, let's talk about the stock and it's getting dizzy. Again, this is shareholder ignorance regarding technology and in terms of valuation. You can oftentimes justify an astronomical valuation when a company is starting out, however, this is a massive company in a maturing product space. Percentage growth becomes more and more difficult to achieve and there's virtually no justification for a 200 plus PE. It's not unusually to see PEs in the high 30s these days for Net hardware companies but that's a new phenomenon. But 200? Let's be serious. The other half of this parabolic rise is the parabolic decline and I can definitely see that coming. Even if CSCO drops in half they still have an outrageous multiple. If the stock loses 90% of its value they will still be in "expensive" territory. I don't expect that to happen overnight but a substantial haircut is definitely in the cards. Anybody really think that CSCO is going to grow from 500 to 600 billion with revenues still hovering around 15 billion? When revenues level off the stock is going to drop to 2X or 3X revenues: 30 or 40 billion from their current 500 plus billion. Excellent company but the poster-boy for investor stupidity in terms of valuation.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next