Profile of the absurd (ranked in descending marketcaps). Compare SONS with these PROFITABLE tech companies:
SONS
Sales: $7.60m
Income: (-$49.3)
Marketcap: $11.8b
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AMD (AMD)
Sales: $3.89b
Income: $356.0m
Marketcap: $10.6b
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Unisys (UIS)
Sales: $7.09b
Income: $455.8m
Marketcap: $3.56b
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Novell (NOVL)
Sales: $123b
Income: $158.2
Marketcap: $3.24b
finance.yahoo.com
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Compare SONS and its' closest competitor, CLRN:
SONS
Sales: $7.60m
Income: (-$49.3)
Marketcap: $11.8b
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CLRN
Sales: $84.7m
Income: (-$8.23)
Marketcap: $1.70b
finance.yahoo.com
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How about SONS and General Motors:
SONS:
Book Value: $2.55
Cash: $155.70m
Sales: $7.60m
Price/sales: $252.31
Income: (-$49.3)
Marketcap: $11.8b
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GM
Book Value: $53.95
Cash: $9.43b
Sales: $184.7b
Price/sales: 0.22
Income: $5.60b
Marketcap: $35.1b
finance.yahoo.com
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'Why is SONS valuation so high?'
1) They use another company's software, 'Pactolus' Rapid-FLEX SCE provides an XML-based, ``drag-and-drop'' visual development environment for the Sonus PSX6000 SoftSwitch.'
biz.yahoo.com
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2) They re-sell other companies hardware, 'Sonus, which began offering its products in late 1999, is forging reseller relationships with companies such as Lucent to spur growth.'
stockfacts.net
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3) They don't make their own stuff, 'Commencing in 1999, we outsourced our manufacturing to third-parties.'
freeedgar.com
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4) They have great numbers compared to their peers:
P/E
SONS: (losing money)
Industry: 62
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P/Sales
SONS: $259
Industry: $22
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P/Book
SONS: $77
Industry: $12
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yahoo.marketguide.com
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5) The institutions love 'em:
Institutional Ownership:
SONS: 2.5%
Industry: 45%
yahoo.marketguide.com
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6) They lose money on every sale, but make it up in volume:
Gross Margins
SONS: 3.92%
Industry: 44.54%
yahoo.marketguide.com
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7) The press loves 'em:
'...reckless, momentum-fueled run-up in Sonus Networks Inc.'
'Sonus has thus become — on a revenue/price basis — one of the most expensive new companies that Goldman Sachs has ever brought to market, with a multiple of 2,236 times revenues that dwarfs the 130 times revenues that Yahoo Inc. sold for in the wake of its own April 1996 IPO.'
msnbc.com
- and:
'Of the 18 Internet companies with market capitalizations of at least $10 billion, Sonus (at $12.2 billion) has by far the least amount of revenue, with Q2 sales of $6.5 million.
In contrast, another networking equipment provider, router maker Juniper Networks (JNPR)(with a $53.6 billion market cap), reported $113 million in Q2 revenues, while caching software vendor Inktomi (INKT) ($12 billion) posted second-quarter sales of $61.5 million.
Trying to figure out Sonus' value as a multiple of trailing 12 months' revenue is impossible, since the company had no sales until this year. Even if the company reaches $40 million in sales this year (it had $7.6 million through two quarters), that would give it a valuation of more than 300x fiscal 2000 revenues. Expensive stock in anybody's book.'
stocktracker.com |
