Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 199.96

-0.6%

Nov 12 3:59 PM EST

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To: Jeff Jordan who wrote (31647)	1/22/1998 11:08:00 AM
From: Gary Korn	Read Replies (2) of 61433

ASND's current market cap of $5.8B is 5 times 1997 sales of $1.167B Given what I believe are conservative 1998 sales of about $1.4B, for the stock to stay at 29 through December would require a 20% compression of its market cap to sales (i.e., a reduction in market cap of from 5 times sales down to 4 times sales). It doesn't make sense to me that that would happen. For the 5x sales figure to hold ASND would have to trade at about 35 by year end. (Isn't that the SSB target?). Among many other reasons, compression doesn't make sense if only because (1) ATM growth, from which ASND profits, is very strong and (2) xDSL growth, from which ASND directly and indirectly profits, has been hyped so much in the last few days (witness PAIR). Gary Korn

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