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Technology Stocks : RATIONAL SOFTWARE- BUY OR HOLD

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To: Bosco who wrote (2304)4/1/1998 7:31:00 AM
From: J.R.  Read Replies (1) of 3115
 
New year for Rational, finally...

FY98 ended yesterday. Today we enter a year of earnings
growth. Yesterday Rational was trading at a multiple of
39 times current year estimates and today it will be only
24 times current (FY99) estimates.

Last October Levy said revenues would grow 25%,year
over year and also that EPS would grow 45% from
FY98 to FY99.

Comparisons are going to be easy this FY. Even the March
quarter just ended will be, because last year both Rational
and Pure Atria disappointed. The combined numbers should
be about .07 per share vs. estimates for this year around
.12 to .14. I believe this year will compare with 1996.
That year EPS were met and exceeded each quarter. As
a matter of fact the share price improved by 36% during
the month of April. Would be nice to see history
repeated.
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