Echelon Corporation (ELON) Message Board

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Technology Stocks : Echelon Corporation (ELON)

ELON 21.88

+10.1%

Oct 6 5:00 PM EST

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To: DaveMG who wrote (3028)	9/30/2002 11:58:21 AM
From: Ted The Technician	Read Replies (2) of 3076

ELON's fundamentals are quite negative. At the industry level, the world-wide economic slowdown and the resulting reduction in disposable income by companies reduces the likelihood of ELON winning any major customers in the near term. At the company level, ELON's financials are reported to be improving on a year-over-year basis. However, on a sequential quarterly basis, its revenue is flattening out. The reported earnings are misleading in that it does not account for the cost of granting options to its employees. Its option granting expenses are so significant that accounting for it would eliminate ELON's reported earnings last year. I don't see ELON having any proprietary technology that will help it survive in a very profitable way going forward. It has not won any major customers in the last two years after having won the ENEL contract. 60% of ELON's revenues is at risk next year when its contract with ENEL will be concluding. There are analyst reports that ENEL is pushing out acceptance of some of ELON's products. This does not bode well for ELON as pushed out orders have a risk of becoming cancelled orders.

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