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Technology Stocks : RadiSys Corp
RSYS 1.720+0.6%Dec 11 4:00 PM EST

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To: Richard Yam who wrote (323)1/31/1997 12:23:00 PM
From: Neil Kalton   of 1472
 
At $49 this stock has a current PE of 37 and a forward PE of 27 based on analyst estimates of $1.80/share (which I think will prove to be conservative) next year. $1.31 to $1.80 represents annual earnings growth of about 40%. Assuming RSYS just meets estimates then the current price seems fair. However, after beating estimates for a number of quarters in a row I place my bets on RSYS earning around $2.00/share next year, which would put annual growth at around 50%. In a rapidly developing market I think 40-50% growth is achievable for a number of years.

Methinks momentum players and panic-stricken sell now while smart money buys. I'm holding.

nk
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