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Technology Stocks : Exodus Communications, Inc. (EXDS) -- Ignore unavailable to you. Want to Upgrade?

To: Doug Meetmer who wrote (927)	7/22/1999 5:16:00 PM
From: Robert Rose	Respond to of 3664

Good point, Doug. However, let's not forget that within the current framework, a price/sales multiple of 25 is quite conservative. Here are a few data points: Stock P/S ----- --- amzn 23 aol 33 athm 163 dclk 30 ebay 176 exds 67 gnet 185 rnwk 76 yhoo 109 Granted, none of these companies are competitors of exds, so we are comparing apples to oranges. Nevertheless, a p/s of 25 appears quite conservative relative to the inet sector, and conservative given exds' current p/s of 67. But yea, if in fact the correction since April is the beginning of a process whereby Wall Street is valuing inets by more traditional metrics, then we still have a long ways to go....

To: Doug Meetmer who wrote (927)	7/22/1999 6:31:00 PM
From: Ken Pomaranski	Read Replies (2) \| Respond to of 3664

<< The interesting thing is that the Robby Stephens analyst is basing his 12 month price target on a year 2000 prive:revenue multiple of 25. In the old days, analysts used to use price earnings multiples, not price revenue multiples. >> << This goes back to my statement the other day (for which I was rudely flamed) that a market cap of more than 5 billion (current) already seems very rich for a company with projected year 2000 revenue projection of 400 million. >> while this is certainly correct for 'value stocks', it is absolutely not true for growth stocks. There have been many, many studies done that show that there is absolutely NO correlation between current P/E or P/S and future price performance. NONE. What I state here is totally against the conventional wisdom. But ask yourself: How many of those following conventional wisdom have retired solely from trading profits? What is MSFT's P/S? There is, however, a VERY strong correlation between future stock price appreciation and future earnings. It's almost as if the stock price is a predicter of future earnings! It can even be earnings WAY out there. The reason I flamed you is that these 'experts' who tout that a stock is too expensive have cost me hundreds of thousands in 'lost opportunity' by causing me too sell to early. Since I've figured out how the market really works, and read many good mathematical analysis of stock movement, I've averaged well over 100% per year over the last 4 years. I didn't do this by buying dog stocks with P/Es of 10. kp PS: I generally agree with you in principle, but you can always generate all these 'what if' smoke screens keeping you from buying any stock. EXDS was expensive at 30. Does that mean that the 4x it's appreciated since then isn't real? because it didn't follow the P/E or P/S rules?