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Technology Stocks : Sycamore Networks Inc-(SCMR) -- Ignore unavailable to you. Want to Upgrade?

To: ratan lal who wrote (1942)	3/6/2001 1:18:48 PM
From: Adam Nash	Read Replies (1) \| Respond to of 2249

Sycamore could have 5x its current revenues in the next 5 years, possibly 10x. Assuming that earnings grow at the same rate as revenues, will SCMR become a mature company like INTC etc. and be valued at similar p/e's (dfcf)? If so, then its price (valuation) 5 or 10 years from now wont change much from today. That would be true, if you believe that the market is pricing SCMR efficiently, ie, with proper correlation to systemic risk in the market (ie, its beta). If we believed that, none of us would be on these chat boards, we would have the Vanguard Total Market Index fund and be done with it. SCMR is no where near the level of maturity that an Intel exhibits, or even a Cisco for that matter. You are talking about a 50x increase in revenues, at least. The point is in terms of potential upside for growth, the potential for SCMR is at least an order of magnitude different than for Intel. If you believe that is already reflected in the current valuation, that is fine. I just think P/E is fairly useless for a company at this stage. Revenues are also likely to grow slower than earnings, for all of the reasons cited in my previous post.