OBJECT DESIGN Inc.: Bargain of the year!! Message Board

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Technology Stocks : OBJECT DESIGN Inc.: Bargain of the year!!

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To: Edward F. Horst Jr. who wrote (2227)	8/24/1998 11:27:00 AM
From: hasbeen101	Read Replies (1) of 3194

Discussion of growth figures in previous post The growth figures are for Most Recent Quarter over the corresponding quarter 12 months previous. This tends to flatter ODIS, since growth last quarter was above-trend (I estimate the trend growth in revenue around 22%) ODIS has a cheaper P/S than any of the other companies, but has a growth rate that puts it near the middle of the pack. I think it is safe to conclude that ODIS is valued more attractively than NOVL, NSCP, or AOL. Cisco's growth rate is about the same as Object Design's, but its P/S is over 3 times higher. This has a lot to do with Cisco's superb margins. As ahhaha has correctly pointed out, Object Design's net margin has been too slender (never better than 8%) and much too unpredictable. Remember that 97/4 was awful: a loss of $1.5M, and 98/1 was a break-even quarter. I think that, to support a higher valuation, ODIS needs to increase the revenue growth trend way above 22% (at least to 40%) and also to fatten its margins (8% is not enough: 10% would be a nice target for the current quarter).

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