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Technology Stocks : RGFX Raster Graphics

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To: joseph burns who wrote (94)	7/28/1997 4:00:00 PM
From: darren_	of 593

>I believe this stock is not just a strong buy but extremely undervalued Currently worth $12-16 but I believe that I have just uncovered something new that just might put this stock into exponential growth that you talk about. Lasermaster (NASDAQ:LMTS) is one of RGFX's main competitors. They are the only other company that sells printers and software. Their success (to the tune of $93 million in FY96) was their electrostatic DisplayMaker Express. Check out the stats on this baby - lasermaster.com 100 sqare feet per hour in "high speed mode" They just cut the price from $69,900 to $49,900 whcih is exactly the same as the P5000's price. Why would ANYONE buy this printer if they can get a P5000 which is 3.6x faster? Lasermaster ( lasermaster.com ) had over 10% of the market in FY96 and I see the P5000 and P1000 taking at least half of their marketshare by the end of the year. Lets do some calculations! Raster Graphics market share in '96 = 4.4% P5000 market share stolen from Lasermaster = 5% (Conservative!) Raster Graphics 1998 market share = 9.4% 1998 Projected market = $1.9 billion Raster Graphics revenue in 1998 = $179 million Raster Graphics profit assuming margins of 8.4% = $15 million = $1.50 eps Assuming a P/E of 45 (45=market growth) we would have a price of 67.5. Again, these are all conservative estimates! Margins WILL improve if we see volume like this and BTW, Lasermaster is almost out of cash! Darren

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