Integrated Systems released earnings.
Here's an updated comparison:
Company Price Revenue Mark Cap EPS P/E Book P/B
Wind River 18 15/16 129,400 815,203 0.77 25 149,414 5.5
Phoenix 8 3/16 124,000 227,449 0.60 14 129,081 1.8
ISI 13 5/16 133,504 311,619 0.69 19 100,791 3.1
In post 4172, Allen Benn wrote:
Is WIND an attractive buy at this price?
The answer turns on one and only one issue. Is WIND's future outlook likely
to result in decent earnings growth? By decent, I mean a sustainable minimum
of at least 20% per annum. If you believe so, then WIND's compressed forward
looking P/E of less than 30 is attractive, and ultimately the new investor
must be rewarded handsomely.
When will the growth rate slow down to 20%? If it happens soon, the stock
price is going to crash. Remember, the 1996 secondary offering price was 12,
so someone who invested and held for 3 years still has a 50% return. The
growth rate looks like it will be 30% for at least a year, so it might be a
good investment, as long as you sell out before growth slows down further.
Many stocks bottom out about 2 years after the last public offering. Wind
River sold convertible bonds in August, 1997. September and October tend to
be bad months for the stock market, so my guess is that it will bottom out
at Halloween.
Wind River still must compete with alternative investments. The PEG ratio
is about the same for ISI and Wind River. Phoenix is lower, but they get 70%
of their revenue from the dying BIOS business. The best opportunities are in
the embedded hardware business:
Company Price Revenue Mark Cap EPS P/E Book P/B
SBS 18 103,000 111,456 1.79 10 72,107 1.5
RadiSys 29 7/8 108,198 234,130 1.26 24 81,696 2.9
There isn't much difference between hardware and software. See the SBS thread
at Message 8540387. |
