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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: bambs who wrote (39354)	8/10/2000 10:56:07 PM
From: The Phoenix	Read Replies (2) \| Respond to of 77398

Bambs, Pro-forma numbers are used to take out inconsistent - non-recurring - non-operating income and costs. This is what most accountants look at in order to compare apples to apples, quarter to quarter. You're continued yammering about 30% YoY growth misses the fact that Cisco had increased ONE TIME costs from acquisitions this quarter. Yes, they may spend more money next quarter too... but then they might not. They may see increased income from investments next quarter..but then they may lose money on their investments. These are NON-RECURRING, NON-OPERATING expenses and income. That's why they are eliminating a we look at PRO-FORMA data. What investors and MM's want to know is what is the health of the underlying going concern. CSCO earned 16 cents last quarter - a 60% growth YoY Using your simple minded math and assuming growth slows to 40% (50% lower than this past year) for the next 5 years and a 50 PE. 2001 - 22.4 2002 - 31.4 2003 - 43.9 2004 - 57.1 2005 - 79.9 (times 4 = $3.20) - A price target of $160 - a 20% annual return... much better than your bonds. I take your pessimistic view to be biased based upon your distaste for the threaders here. But it is nonetheless flat out wrong and misleading. Cisco EARNED .16 cents from OPERATIONS - THAT is what counts. Even at your assumed 30% growth (HALF WHAT CSCO DID LAST YEAR) 2001 - 20.8 2002 - 27.0 2003 - 35.2 2004 - 45.7 2005 - 59.4 (times 4 = $2.38) or a price target of 119 assuming a 50 PE.... And that is 12.5% annual growth rate - still twice what you're earning on your bonds after tax. So, when we look at the FACTS the fact is CSCO can see earnings growth CUT IN HALF and still generate better returns than your fixed instruments and a better return than historical old world DOW stocks. Of course we all know that Cisco will continue to show earnings growth for the forseeable future of greater than 30%. CHambers provided very upbeat forward looking comments and said he see's no signs of slowing...... OG