Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 205.50

-1.5%

Dec 5 3:59 PM EST

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To: Tim Luke who wrote (58569)	1/11/1999 12:29:00 AM
From: Bharath Rangarajan	Read Replies (2) of 61433

I hope that the buyout price is higher than $85. From a valuation point of view, ASND seems more reasonable than the other large networking stocks. ASND's projected EPS for 99, is $1.66. Their growth rate is 41%, so at 1x growth the stock should be at $68. CSCO on the other hand has a projected EPS of $1.82, and their growth rate is about 25%. So at 1x growth CSCO would be $43. CSCO is actually getting ~2.5x growth. To put things in perspective, LU growth rate is 20%, and their estimated EPS is $2.50. LU's price at 1x growth is $48, and its also trading close to 2.5x growth. The question then is why is ASND still lagging, instead of trading at 100+. Admittedly people pay more for the leaders, but a factor of 2 seems very large. Unless LU offers a very good deal, it seems like we will get an overvalued stock for one thats more reasonably priced. JMHO Regards, BR

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