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Technology Stocks : Network Commerce Inc (NWKC)(was shopnow)
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To: Paul K who wrote (107)6/13/2000 11:32:00 PM
From: Paul K   of 127
 
I grabbed a few pertinent posts from Yahoo....

let's look at fundamentals
by: lokiman72 5/3/00 11:07 am
Msg: 6348 of 6353
Let's look at the fundamentals for a change. SPNW has a market cap of $250 million. It is spending money at the rate of about $40 million/qtr.(sales/mktg/r&d/g&a) It's revenue run rate this year appears to be about $100 million and next year close to $200 million. If you assume that spending goes up next year to achieve the higher sales, you can see that the company comes very close to breakeven toward the end of next year. From then on, the ramp up of earnings is like an ICBM launch from a submarine. This occurs because the company will be running at that time ~55% gross margins (currently 44%). Each dollar of Sales beyond the $200 million mark starts to flow down to pretax at the rate of $.55/$1.00 of sales, I.E. the next $100 million of sales, produces ~$1.00/sh of pretax.
When the Wall St. analysts project sales & growth out for this company and discount the stream back at 20%+ discount rates, you get a value for SPNW that ranges from $30-50/sh.
In other words, this is not a $5-6/sh stock for long. It is only so because people are not running the numbers and because a lot of people bought Internet stocks not understanding the business models. This stock at this price is a gift for the investor. Good luck making your own decision.
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