InfoSpace (INSP): Where GNET went! Message Board

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Technology Stocks : InfoSpace (INSP): Where GNET went!

INSP 83.20

-0.3%

Nov 20 3:59 PM EST

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To: playavermont who wrote (22800)	12/14/2000 5:39:24 PM
From: Killswitch	Read Replies (1) of 28311

I think the key is P/E ratio and more importantly PEG for profitable, quick growing companies like INSP. But that analyst has made a big mistake in his calculations- he is using gross margins to calculate their profits, not their net operating margins. INSP stated in their last quarterly guidance they expect maybe 18% net operating profits for 2001. So let's say that goes up to 25% by 2003, then they should have anywhere from $250mm to $400mm in profits that year based on what their revenues end up being. If they can maintain a high P/E of 80 at that time then the max market cap you could expect in 2003 would be around $30billion, or about 7-8x what it is at now. To get anywhere higher than that would require some means of taking in even more revenue.

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