Merry Christmas,
No no no no..., I meant tell me. Don't know too much about this stock.
Got this blurb from somewhere. Last line is what worries me. But if COMS retreats some more I think leaps look good.
3Com (COMS) reported earnings of $0.36 per share compared to consensus estimate of $0.31 per share. COMS earned $0.01 in the same period last year. Revenues in the quarter came in at $1.54 billion compared to $1.20 billion last year. The upside came from better-than-expected revenue growth, improving margin and lower tax rate. Revenue growth was 9.6% sequentially due to positive trends. COMS saw solid improvements in international sales, which grew 17% sequentially and represented roughly 45% of total sales, driven by growth in Europe. Systems revenue grew 9% sequentially, representing 48% of overall revenue and client business was up 10%, comprising 52% of revenue. Gross margin rose to 46.9% versus last quarter's 44.8%. This was primarily due to improved product mix. Management provided a positive market trends and expects overall market growth in the mid-teens. COMS wants to aggressively pursue several markets where growth opportunity is high including, LAN telephone, VOIP, hand held computing, home networking and broadband and wireless access. Despite solid results, Hambrecht & Quest issued a "hold" rating on the stock because COMS is already trading at a substantial premium to its growth rate. Currently, shares of COMS are trading at 36x and 25x HQ's 1999 and 2000 earnings estimate compared to its growth rates of 15-18%. Furthermore, COMS may have difficulty replicating this quarter's results next quarter.
Kiri |
