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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 77.42

+4.6%

3:59 PM EST

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To: leebo who wrote (21381)	1/31/1999 11:50:00 AM
From: RetiredNow	Read Replies (2) of 77398

What do you base $185-200 on? Their First Call estimates are that they will earn $1.61 for the 12 months ended 1/00. If you use a PE of 100 at that time, you get $161. Cisco is growing at 35% per year, so if you use a more reasonable PE, say 75, you get $120.75. It seems to me that you are definitely caught up in the Internet mania valuation methodology. Hell, I think a 75 PE is too high as well. If the mania doesn't abate by YE, then we could see your $185-200. However, if people start realizing their craziness, our market could be in for a 30-40% correction this year, Cisco included. Then a $120 valuation by YE doesn't seem so low.

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