PMCS used to be the dominating ATM physical layer vendor, who has a near monopoly over OC-3, and to a lesser extent OC-12, ATM PHY chips (up to 622 Mbps). These chips are rapidly becoming commodities and the price and profit margin are deteriorating. Although PMCS is an outstanding company and it is expanding to chip designs other than ATM physical layer, it is still a silicon-only shop (correct me if I am wrong). The competitors are catching on and its stock price is almost 20% higher than the pre-October peak.
On the other hand, VTSS with its cutting edge in AsGa chips design and dominates all categories of ultra-high bandwidth data/telecommunications and ATE (Automatic Test Equipment) with speed OC-48 (2.5 Gbps) and above, be it Gigabit Ethernet, ATM, Fibre Channel, SONET, DWDM or satellite/mobile chips. However, VTSS is still under the pre-October peak.
When PMCS has a 1999 estimated PE of 48 and growth rate of 17% ($1.37/$1.17) vs. VTSS's 99 PE of 30 and growth rate of 43% ($1.17/$0.82), where is the value?
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