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

To: The Phoenix who wrote (12862)	3/10/1998 1:38:00 PM
From: Jan Crawley	Read Replies (2) \| Respond to of 77400

Hi Gary, I hope to buy some Csco at $<55. Comments appreciated. Jan

To: The Phoenix who wrote (12862)	3/11/1998 10:32:00 AM
From: tepli	Respond to of 77400

Gary ! You said: "I think the slowing revenue growth has already been dialed into the stock, but margins might become an issue this quarter and going forward. This _could_ hurt the stock a bit because this factor may not be dialed into today's prices." I'm afraid I have to disagree. I worry more about the growth. Gross margins have been constantly +65 %. Last 4 quarters 65.10-65.48 %, and the last Q was the highest. Margin on the Operating Income level has been 32.21-32.74 % last 4 quarters, again the latest was highest. USD has been strong for more than a year now, so that has not caused any problems. The margin pressure should come from competitors or from the product mix. ?? I can't tell. The latest growth scenario looks like this: Sales growth last Q 27 % y/y. EPS growth last Q 26 % y/y. I/B/E/S FY 98 EPS 1.74 I/B/E/S FY 99 EPS 2.14, implying growth of 23 %. Yet, I/B/E/S 5 yr. growth estimate remains at 30 %. This makes me wonder what are analysts' growth expectations for FY 2000 - FY 2002 ? 35% ? It's much more easier for a company to grow when they have $8bn in sales than when they have $10 or $12 bn in sales. Some analysts might discover this too. Bottom line, I think CSCO is a bit pricey now. I'm not selling, I'll buy more if/when it dips. After all I guess the Ford -family didn't sell their company when it launched the T-model.