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Technology Stocks : Citrix Systems (CTXS) -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (7045)	10/24/1999 9:57:00 AM
From: mauser96	Read Replies (1) \| Respond to of 9068

Nice to have you back. According to Moore, the the bowling alley is is located at the frontier of the mainstream market, just at the right side of the chasm (page 29 older version). "MainStreet" comes later, but this is confusing so I don't like to use the latter term. I usually refer to it as the mass market or majority market.I know this sounds like newspeak jargon to some on the thread, but it is the only way I know to have a common reference standard and common terminology. I don't consider it off topic, since it applies to CTXS. I think CTXS sales volume($105.8 million last quarter) and it's earning growth quarter to quarter are not at levels that could be called hypergrowth. I would like to see something approaching a 20% quarter to next quarter level as a minimum. It's encouraging that so many big companies are trying out Citrix products, but if they were really happy with the product we should soon be seeing bigger sales volume. Has the dissatisfaction with the high overall costs of their usual fat client server networks reached the level that companies are willing to take the jump to a "radical" solution like CTXS? Are there niches inside the mass market that are hurting a lot more than the rest? I don't know the answers to these questions, but the next few quarters should tell the story. I have never believed that the Citrix solution would be useful to all computer users, so perhaps it will never do more than dominate several niches,but that would still represent big profit growth.

To: Mike Buckley who wrote (7045)	11/3/1999 12:35:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 9068

Mike, First, today is a wonderful day to be a Citrix shareholder, but I must wonder if there is any particular news driving the stock other than its addition to the S&P 500. Second, the question of valuation in connection with SEBL is indeed worrisome to me. I like the company and its business, BUT -- price does matter. If we were prescient and were able to look out at the company say 10 years from now what would its earnings need to be to justify today's prices? Assume that in 10 years the company becomes mature, and at that point commands an earnings yield of 7% (P/E of around 14). Assume further that investors will demand a risk premium of roughly 15%-20% (insert your own number here) on top of the current risk-free rate of 6%. So we end up with a risk-adjusted discount rate of somewhere between 21% and 26% over 10 years. With a current price of roughly $120 that implies a share price of between $807 and $1,210, with earnings of roughly $56.50 to $84.72. Is this is possible? I tend to doubt it. I believe that current valuations either signal much more grandiose expectations or, more likely, a bubble created by momentum investors. I am very wary of pat ad hoc formulae developed over the past few years to explain away inflated share prices. Companies like COMS, IOM, NETA and PSFT (among a raft of others) should give one pause. At some point reality will return. I think we are beginning to see this with AMZN (which I predict will be the next Boston Chicken). So far as I can tell, SEBL is an excellent company with wonderful prospects, but I think it is a poor investment because of its price. TTFN, CTC