ACTM $100 Million Cable Modem Contract with MOT Message Board

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Technology Stocks : ACTM $100 Million Cable Modem Contract with MOT

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To: Rob Preuss who wrote (260)	10/22/1997 8:11:00 PM
From: j rector	Read Replies (1) of 1250

>>Lets see. If CY97 revenue is $270M and we saw only 25% growth then CY98 revenue would be about $340M; with a gross margin of 11% we'd see CY98 gross profit over $37M and with SG&A at 5% (or $17M) we'd see a CY98 operating income of $20M and a net income in the vicinity of $12M or $1.33/sh. Assuming ACTM is worth at least a forward PE of 25 means we should be fairly valued around $35/sh or about twice the current market price. The only thing that I am concerned about is capacity. If the 10 MM this quarter is not additive, it seems like they are capacity limited. How do they grow revs 30% while being capacity limited?

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