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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 71.08

+0.1%

Nov 7 9:30 AM EST

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To: Eric who wrote (18649)	11/1/1998 1:46:00 PM
From: jach	Read Replies (1) of 77397

COMS and CSCO comparison ------------------------- Profit: CSCO profit margin is 3 times of COMS Per employee revenue: CSCO 600K, COMS 450K (CSCO around 1.3 times of COMS) Revenue: CSCO ~10B, COMS ~8B (CSCO around 1.2 times of COMS revenue) Mkt Cap: CSCO ~100B, COMS ~13B (CSCO 7 times more valuation than COMS) Stock Price: CSCO 73, COMS 37 Some interesting numbers: csco per employee revenue (600K=> factor 6) times net profit last qtr (~20%) is 1.2 coms per employee revenue (450K=< factor 4.5) times net profit last qtr (7%) is around 0.31 IMO, csco is running at its peak performance and will be hard to maintain this rate, that is generating profit of 1.2$ for every 6$ per employee revenue. COMS is generating profit of 0.31$ for every 4.5$ per employee revenue. It looks like COMS has quite a bit of room for improvements. FOr this, COMS need to maintain the current margin on low end (tough) and focus more on the high-end segment. The next qtrs release for both companies will be interesting to watch for these numbers.

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