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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: JHC44 who wrote (20853)	11/3/1997 10:22:00 PM
From: Sector Investor	Read Replies (1) \| Respond to of 61433

<<Even with less profit possibly that means 30% per year EPS growth. So is this stock worth 30X 1.15 (est. '98 earnings) or $34.50??????????????? Comments appreciated.>> I think your estimate is low. Even though margins will drop in 1998 (so will the competition's), their fixed overhead should not rise all that much. This means that more of each added revenue dollar goes to earnings even though gross margins are lower. I bet you'll see analyst estimates move to something like $1.25-$1.35. And 10% qtr to qtr growth should be worth a 36 PE and so a 12 month price target of $45-$50.