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

To: sepku who wrote (22139)	11/8/1997 11:53:00 PM
From: Clare	Read Replies (4) \| Respond to of 61433

Slowing momentum from Cascade. Transition from leader of the "frame-switch" market to ATM cell switch didn't need the distraction of a merger with Ascend. Any time you have a merger, you get churn, reorganization lowers morale, and the people in the takenover company feel displaced. Add to that their options must be under the water at the moment. In any case, new CFO said it's time to rebuild the company. And I hope these problems are behind them and they can refocus on their core strengths.

To: sepku who wrote (22139)	11/8/1997 11:58:00 PM
From: Gary Korn	Read Replies (1) \| Respond to of 61433

Style, How about we look at the p.e. for the networkers, based on past earnings. Does ASND appear overpriced on this measure? Not to me. I'm listing what I can here. Please, anyone who can correct the numbers or fill in the blanks, please do so! Estimates for FY97 for ASND are about 1.08 and ASND is now trading at 24 1/8, hence its p.e. of 22. If ASND has any increase in earnings in 1998 (and they are projecting about 33% increase in revenue), then the p.e. number will decrease. Analysts now project 1998 earnings of 1.27 (a p.e. of 19). STOCK P.E. CS 18 ASND 22 (based on 4Q estimates) NT 32 COMS 33 XYLN 36 TLAB 40 CSCO 48 NN 49 FORE 62 LU 99 NETG 300 XIRC ? BAY ? SHVA ? If ASND were to fall to 17, as some on this thread have pronounced, its p.e. based on 1997 sales would be 15.7. Nike, with revenue growth that may top 10% (versus at least 33% for ASND) has a p.e. of 17.3. In reality, you could double ASND's stock price from here and still have a p.e. in line with the network sector. Furthermore, if ASND were not to "save" some backlog for next year, according to the new "conservative" plan -- which in my opinion is an effort to limit the stock price before a merger is announced -- then its 1997 earnings could certainly be more than are being projected, further strengthening the p.e. ratio. (Maverick previously has noted an order backlog of some $300MM) Gary Korn