PairGain fundamentals Message Board

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Technology Stocks : PairGain fundamentals

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To: Shorty who wrote (24)	12/10/1997 3:31:00 PM
From: Clam Clam	Read Replies (1) of 36

>>Does any one know if PairGain is REALLY being affected by the Asian situation? Well, you would think so given the stock performance lately. However, Pairgain's growth is through US RBOCs which have nothing to do with Asia. Pairgains products speed up data traffic on installed copper lines. Asia is in the beginnings of an infrastructure build-out so there isn't much need to speed up lines if there aren't any lines installed in the first place. The projections on the street are reasonable. Adtran has been irrational with their pricing and so revenues are being hurt in the near-term as PAIR competes. This reduces growth in the near-term for Pairgain but the numbers are reasonable to begin with so we aren't talking about a major miss. Pairgain's other problem is lumpy buying by customers so that is the bigger risk. Net net, we are only talking about a penny or two. The question is not the E (current estimates are about right) but what is the right P/E. The P/E looks ok to me but in the short-run it could easily go lower. Therefore, my strategy is to buy on weakness. It looks like there is good support in the high-teens. Good luck.

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