Thanks for the post, Jim. The news sure is "not good." At current estimates, the stock is selling at a PE of 27x fy99 EPS...not real cheap when one considers that the 5 year high PE average is 24.5x, and in its heyday, the stock was selling at a multiple of 28 to 30x.
From a price to sales ratio standpoint, however, the stock does not look all that bad...I am counting on a terrific slowdown in revenues for the quarter and the year, which will put the revenue per share way down to about $5.60 per share annualized, for a current PSR of 2.3x. This is well below the average PSR over the last 5 years, and on this basis, the stock is a probable buy. But alas, more bad news is undoubtedly on the way, and the price could reach single digits as holders flee the stock for better investments. |
