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Technology Stocks : Red Brick Systems

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To: Mark Finger who wrote (235)4/22/1998 1:45:00 PM
From: Sam Citron  Read Replies (1) of 304
 
the P/S ratio is currently 2. That is pretty high for a company that is only marginally profitable (on an operating basis). Those that have higer P/S ratios generally also have higher profit margins (generally at least 20% at the operating level before taxes).

I don't know of any correlation between P/S and profitability on an operational basis. Intuitively, there should be such a correlation, but P/S can factor in alot of expectations about future growth.

If P/S=2 is high, what companies in the peer group have lower P/S?

As a matter of fact, please help me to make a schematic of the industry. Who do you feel are REDB's direct competitors (beside the perennial MSFT threat)?

SC
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