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Technology Stocks : PairGain fundamentals

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To: Bobo who wrote (35)	1/9/1998 7:38:00 PM
From: Clam Clam	of 36

Here is my theory on PAIR: The current thinking is that they make the $.17 quarter but come in a little light on revenues. The consensus estimate right now is $.85 (with a current range of $.78 to $.91). That will probably change to a range of $.78 to $.85 with a consensus in the low $.80's. These numbers already reflect more market share losses than PAIR has suffered in core HDSL. Numbers are roughly right but PG-Flex assumptions will probably need to be tweaked down. It seems PG-Flex did not have a big quarter coming off its 30% Q/Q growth in September. Nobody really can explain rollouts at RBOC's. RBOC's are not efficient companies and don't always do what makes business sense. Its tough to have such kinds of behemoths as customers as lumpy rollouts are the rule rather than the exception. I have a higher than full position (1.5x what is typical) as I added more yesterday under $17. We might be going slightly lower but 20x conservative estimates is too good to pass up. I am predicting merger rumors to begin soon as other telecom companies would love to leverage their customer bases (int'l companies) by selling 'em PG-Flex. There aren't any good small cap telecom equipment companies so I own this one as a telecom holding.

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