From the Motley Fool:
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3Dfx (Nasdaq: TDFX) remains an enigma. The company almost turned its five-cent per share earning estimate into 3D, reporting $0.13 per share, well above expectations. Yet the stock tumbled. Fourth quarter results for 1998 were two cents lower than earnings in '97, even though revenue grew 170% to $60 million. What's down? The company's gross margin fell to 36% from 48% last year because it's selling more low-end and less expensive product.
3Dfx now has $1.33 in trailing earnings per share, putting the $12 stock at a P/E of 9. Unfortunately, this isn't unusual for a small chip-related technology company. With $95 million in cash, however, the company has nearly $6 per share of value backed by green money, so how much lower can the stock go? Hmm. It trades at 19 times the earning estimate for 1999. To hear the company's conference call, dial 800-633-8284 (access code: 11550030) for 24 more hours.
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