Azenta Message Board - Msg: 23876790

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Technology Stocks : Azenta

AZTA 29.28

-4.2%

11:56 AM EST

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To: EACarl who wrote (898)	9/12/2007 11:49:27 PM
From: The Ox	Read Replies (1) of 1138

GS is expecting revenues to decline by 20% in FY08 vs FY07. They are expecting EPS to decline by roughly 33%. So, in their mind, giving a stock an 18PE during a period where EPS declines by 33% and revenues are falling by 20% is being generous. Going back even farther, last Sept's quarter showed revenue over $210MM and expectations for this Sept's quarter are for about $170MM. Taking 20% off of $170MM drops revenues expectations down to $136MM for Sept 08's quarter, or only 65% of what revenues were in 2006. Clearly they believe the trend is down and will continue to be down for at least the next year. If their predictions come to pass, then $7/share might be considered "reasonable" a year from now. At a $150MM per quarter revenue run rate, the price to sales ratio for a $7 stock with 70MM shares outstanding would actually be 1.22 and not the 0.25 you are suggesting. EDIT ( I see my error: actually the P/S would be 0.81 NOT 1.22 but the point is still the same ) I think this is a doom and gloom scenario but its my understanding that this is what GS is spouting right now.

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