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Technology Stocks : Data Dimensions

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To: taxikid who wrote (1064)5/6/1997 2:43:00 PM
From: Jalali   of 4571
 
The $750 Million Ardes Sales Gap ?

DDIM has never make any money on its consulting business so we can ignore this revenue in our analysis. But let us assume Ardes2k is a fantastic success and DDIM sells a ton.
We have 19 months until the January 1999 the last date anyone in their right mind would buy a YR2000 project planning and management tool.
DDIM has a Market Cap of $ 300 Million. Assume a generous 25% margin on sales requires about a $1.2 Billion in sales to pay back an investor.
Now divide $1.2 Billion by 19 months and we get $760 Million Ardes2k sales per year.

Note: Mr. Martin stated in the phone conference that he projected Ardes2k sale should provide 15% of DDIM's revenue by year end. This would be about $4.5 million on $30 million annual sales.

The numbers tell us that DDIM must sell $760 Million in Ardes2k sales, but Management says sales will be maybe $4.5 Million ?
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