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Technology Stocks : Echelon Corporation (ELON) -- Ignore unavailable to you. Want to Upgrade?

To: Lone Star who wrote (1723)	4/5/2000 5:30:00 PM
From: hueyone	Read Replies (2) \| Respond to of 3076

I have held ELON before and followed the relevant discussion on the G&K thread, although I am sure I missed a lot by not hanging out here. There certainly is a tremendous opportunity for this company, but I sold ELON for a profit some time ago because of valuation concerns. My problem is connecting the stock price, the income statement and the vision. The gap seems too wide. That is why I asked about the guidance going forward. Many executives do in fact give more specific guidance than the vague answer Oshman gave. An executive can always pick a conservative number the company is reasonably assured of making. Regarding vision, it is my understanding, in G&K terms, that the company has not crossed the chasm with respect to home automation or industrial automation, but is in the bowling alley regarding building automation. Here is what I see for actual performance: 1. TTM YOY revenue growth rate of 23.49%, 2. Past Five year revenue growth rate of 22.8%, 3. No profit in 11 years of business 4. TTM sales of 39.8 million and a 4. Very large price to sales ratio of 54.21. The company is currently valued like it is much further along the technology adoption life cycle than it is. It is valued like it is already experiencing revenue hypergrowth in a technology tornado. But the guidance you provided me expects a flat quarter coming up followed by "substantial growth in 2001", which is vague at best. Buying the stock again at this lofty valuation would be be justified for me if I had a great deal more certainty that the world was moving towards an Elon node in every smart device and that the Elon protocol was going to be the standard. Although the press releases and value chain are indeed favorable, there is very little evidence of success in the income statment. So the combination of high valuation, the Elon income statement, early position in the technology adoption life cycle and vague forward guidance taken together is enough to persuade me not to dip my toes back in at this time. Nevertheless, I sincerely hope your confidence in the company is well placed and that I will get another chance to reinvest in ELON at a later date at a risk level I am personally more comfortable with. Back to my regularly scheduled programming. Best Regards, Huey