Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: TEColeman who wrote (3269)	3/11/1998 1:47:00 PM
From: Scott Maxwell	Read Replies (1) \| Respond to of 93625

If I might weigh in here: REH, your projections are not too far off mine until you get to the PE part. Rambus is currently valued on its year 2000+ revenue potential, so suggesting that it might have a PE of 130 when it achieves that potential is, IMHO, irresponsible. The royalty stream has to be viewed as similar to an oilfield's: obsolescence of the standard will limit the lifetime of the revenue stream. So when it actually comes in, the company will likely get a correspondingly low PE, 20 at most, unless the revenue stream has been plowed back into future standards with similar potential. Regression to the mean makes repetition of a big hit unlikely, so I think the bottom end of your estimates is the most Rambus investors should hope for. I'd love to be surprised by some new developments from the research labs which could keep that PE up in the 40s, but expecting it would be foolish. TEColeman, OTOH, does not see that the uncertainties for Rambus are far lower now than for, say, Excite or Lycos, and that the stock is now cheap relative to its future potential and other "next wave" tech stocks.