RATIONAL SOFTWARE- BUY OR HOLD Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : RATIONAL SOFTWARE- BUY OR HOLD

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Elroy who wrote (2455)	6/4/1998 12:10:00 PM
From: Alomex	Read Replies (1) of 3115

Successful software companies (MSFT, SAP, PSFT, BAAN, SEBL, many others) trade at much higher sales and earnings multiples than RATL. On a valuation basis for software stocks, the company is inexpensive. Look at revenue growth PSFT: over 20% per quarter MSFT: 8% per quarter BAAN: 15% per quarter (except last quarter, which caused a 20% drop in share price). SEBL: 20% per quarter If you look at earnings the growth is similar. Now look at RATL. Almost zero revenue growth (using consolidated statements) plus several quarters of losses followed by tepid earnings. Currently, the stock price has a built in assumption that earnings will normalize and stabilize at nearly twice the level they are now at.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next