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Non-Tech : The Critical Investing Workshop -- Ignore unavailable to you. Want to Upgrade?

To: Mannie who wrote (31584)	9/1/2000 8:07:29 PM
From: Mannie	Respond to of 35685

GlobeSpan's experience with DSL technology dates back to 1987, when its engineers helped pioneer the product at Bell Labs. Prudential Securities' John Barton notes that the company has the largest research and development effort in the industry, with a research staff of 450. GlobeSpan is the only company in the sector to offer chips for every flavor of DSL technology. As a result, the company is growing at a feverish clip. Sales in the June 1999 quarter were just $9.4 million. A year later, sales skyrocketed to $75.9 million. Analysts figures sales will rise to $475 million by the end of next year. That could prove quite conservative as the company's recent quarterly results have been well ahead of consensus estimates. Terayon Communications (NADAQ:TERN) has put up equally impressive growth metrics. Terayon is a leading player in the fast-growing cable modem business. From just $2 million in sales in 1997, Terayon went on to sell $32 million worth of modems in 1998, and $97 million in 1999. In the first six months of this year, Terayon has already bagged $151 million in sales. W.R. Hambrecht & Co.'s Tim Savageaux estimates that the cable modem market will grow 90% a year to 10 million units by 2002. A typical cable modem sells for roughly $200. Garnering a decent slice of that pie, Chase H&Q's Jeff Lipton expects Terayon to garner more than $686 million in sales by next year. That estimate could prove quite conservative for a pair of reasons: First, the company continually surpasses quarterly revenue expectations by a wide margin. For example, Lehman Bros.' Steve Levy notes that Terayon has surpassed his revenue expectations by 37%, 22%, and 15% in the last three quarters. Second, Terayon made six acquisitions that greatly expanded the number of market opportunities it serves. Currently, Terayon is second in the industry to Motorola (NYSE:MOT - Quotes, News, Boards) , which controls 35% of the market. Terayon, at 6.5 times projected 2001 revenue, trades for roughly half the multiple of other broadband players, according to Merrill Lynch's Tim Long. He figures the stock will trade to $110 over the next year, as that valuation gap closes. Lehman's Levy is more aggressive, figuring the stock is worth $163. Almost all fast-growing companies carry correspondingly lofty stock prices. Investors looking for a bargain in the group may want to take a stab at Broadvision (NASDAQ:BVSN - Quotes, News, Boards), which makes e-business software. Shares of Broadvision trade near six-month lows and nearly 70% off their 52-week high. Investors have grown concerned that Art Technology Group (NASDAQ:ARTG - Quotes, News, Boards) is stealing away key customers. But analysts have been quick to dispel that notion, and insist that the company's impressive growth spurt is quite sustainable. Over the last five years, Broadvision has boosted sales 282% annually. Year-over-year quarterly growth surged even higher to 306% in the quarter ended June. Broadvision is benefiting from one simple trend. Companies have come to realize that developing a Web site from scratch is a big waste of time and money. Instead, they are turning to outfits like Broadvision, which offer off-the-shelf software that can launch a site in a jiffy. Analysts expect Broadvision to keep growing strongly, thanks to its aggressive international efforts. The company derives 33% of sales from abroad, a figure which should rise as European and Asian firms quickly catch up to their web-enabled U.S. counterparts. After bagging $116 million in sales last year, Broadvision already has $156 million in revenue in just the first half of this year. By next year, analysts figures Broadvision will garner $578 million in sales, according to I/B/E/S.