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Technology Stocks : LEGATO SYSTEMS LGTO

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To: Phil(bullrider) who wrote (1026)	5/18/2000 2:39:00 PM
From: Edwarda	Read Replies (1) of 1138

Hi, Phil! From what I can tell right now, we are in a "good news, bad news" kind of situation. The current, really stringent revenue recognition policy virtually ensures very high visibility for deferred and backlog revenue. The company will not recognize revenue at all until the cash is in hand, which is the most conservative policy in the industry. The bad news is that because of this revenue recognition policy, estimates of revenue growth over the near term are falling. Meanwhile, the company does have the expenses of beefing up its sales force. I have lowered my estimate to 5 to 7 cents per share for 2000 based on a revenue assumption of $262.5 million.

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