Remedy Taking a hit why? Message Board

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Technology Stocks : Remedy Taking a hit why?

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To: Richard Chow who wrote (57)	1/26/1997 8:34:00 PM
From: Larry Abrams	of 763

Sequential sales growth is key to RMDY having any EPS suprises. Last Q's sales growth was 24.6% for new licenses. (Maintence revenue seems steady at 21-22%). Their EBIT rate is phenomenal at 31%, but I think that any slippage in margins through giving price concessions through their indirect channel partners will be compensated by sales growth. The question is what can stop them? Is competition heating up? The only negative I can find is that a new release of AR 3.0 announced on Nov 4 to ship in Dec might have caused customers to pause and wait for the new release. Does anyone have any knowledge of how this new release went? The other concern I have is their DSO (average days receivables). CLFY got hit hard on this with claims of back end loading. Right now DSO for RMDY stands at 62 days...watch on Tuesday to see if this changes significantly..if it goes up much.. there will be cries of "channel stuffing" since, unlike other companies in their group, a significant proportion of sales --41%--goes through the VAR channel. My conclusion is that there will be BIG movement after the announcement. BIG UP OR BIG DOWN. I just don't see anything in between. This suggest some sort of straddle play Any suggestions??

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