Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 206.71

-0.9%

12:39 PM EST

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To: The Phoenix who wrote (46483)	5/11/1998 10:24:00 AM
From: Leeza Rodriguez	Read Replies (1) of 61433

PSR comparisons between LU and CSCO: I have been tracking hi-tech PSR's for a a couple of years and my findings are that the allowed PSR in the marketplace is primarily a function of margins and secondarily a function of sequential sales growth and LT debt. The gross margins at LU are in the low 40's% , while CSCO's gross margins are ~ 65% . Thus, the two stocks should NOT trade at PSR's even remotely close to each other. Don't get me wrong, I love LU and think it is the blue chip of the decade, but don't go around thinking that LU should trading at a PSR=4 or 5. IMO, they would need gross margins closer to 50% to achieve that kind of valuation. Leeza Rodriguez

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