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Technology Stocks : COM21 (CMTO)
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To: pat mudge who wrote (2191)7/3/2000 9:24:33 AM
From: zbyslaw owczarczyk  Read Replies (2) of 2347
 
CSFB report on Com21 as of June 19:

This was posted on Yahoo.Margins to 40-50% in several quarters starting Q4.

Analyst comments -
by: hwbtws1 (30/M)

6/27/00 9:15 am

Msg: 17656 of 17795
In a report dated 6/19, CSFB had the following comments regarding CMTO
based upon a meeting with company management:

- currently focused on expanding product portfolio into additional voice
and data platforms, including systems infrastructure and software,
SOHO products, and video applications for a variety of broadband access
technologies. Current product mix is 86% cable modems and
14% systems & software. This is seen as improving over the next 18-24
months to approx 40% modems and 15% each for software,
business products, voice products, and systems products. Based upon the new
products to be introduced during late Q3/early Q4 potential
exists for margins to improve significantly over the next several quarters
(beginning in Q4). The company's targeted gross margins are in the
range of 40-50%.

- DOCSIS CMTS remains on track for a late Q300 intro. Is currently in dry
runs at CableLabs (CMTS qualification expected to begin in
mid July). Company plans to target smaller MSO's rather than compete
directly with CSCO. Also developing a small footprint platform for
mini-fiber node deployments, which fits nicely with AT&T's preferred
architecture.

- Q2 is tracking to consensus estimates on top and bottom lines. Company's
bookings and outlook are good despite short term component
constraints.

- Valuation attractive at 1.2x 2001 sales vs. peer group average of 2.4x.
Maintain BUY rating and $75 target.
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