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

To: hueyone who wrote (1929)	4/24/2000 10:34:00 AM
From: John Madarasz	Respond to of 3076

Huey... Service revenues are at 5.6% of total revenues... and are planned to decrease as per company licensing strategy. Regards, JM

To: hueyone who wrote (1929)	4/24/2000 7:38:00 PM
From: Dinesh	Read Replies (2) \| Respond to of 3076

Huey, Stansfield said product revenues will grow about 30% year over year, plus or minus 10% in any given quarter. However, service revenue will decline about 20% on a year over year basis. If you put the two together, you come up with a projected annual revenue growth rate under 30% Doesn't take a PhD in neurosurgery to arrive at that conclusion. Question is how much lower, and the answer is ? Remember that service revenue is only about 5%. I'll give a hint -- rounded, the number is still 30%. At a price to sales ratio of 28.6 on Friday's close, Elon is priced similar to companies growing way faster who also have earnings ... I hope to make a purchase of ELON at much lower prices--- less than half of where it trades now Even at half the price ELON's PSR would be way too high for a company with only modest growth rate. So, why all this interest ? It may seem as if you are only interested in jawboning this down. Is this so that you can - (a) get in at a lower price. (b) cover a short with better gains (c) cover a short that ran against you for the last 3 months (d) some other covert reason Only you can clarify your position. OTOH if 2x will make a stock "significantly overpriced", your investment criteria must be pretty down to earth. Kindest Regards Dinesh