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Technology Stocks : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: N. David Lessani who wrote (1567)	4/3/1998 7:01:00 AM
From: Mark	Respond to of 5944

David, There seems to be a trend in downward earnings revisions at the moment. beta.nasdaq.com Does anyone have full access to Zacks ? If so, can you provide some details of the last 3 or 4 '99 numbers ? The most recent earnings adjustment that I am aware of gives a target of $1.27 for '99. Now, you might think this is pessimistic, and the mean at around $1.83 (Nasdaq) or $1.77 (First Call) is more accurate. However, I think many of the current estimates are quite old and based on outdated information. The most recent estimates are likely to be based on more recent information and may have the most credibility. It would be interesting to know what the new consensus number would be if all the analysts were to review the situation today. Perhaps some (many ?) will feel $1.27 is too low. Perhaps some will think it too high ? I don't know if $1.27 is realistic, but I do have real doubts about $1.80-ish being the consensus for much longer. Especially with one wave of "rationalisation" costs recently announced. On a basis of $1.27, and stock price around $21, the PER is in the 17 range. Furthermore, the earnings would also show a decline between '98 and '99. What PER is appropriate for a stock with declining earnings ? If you read "Super Stocks" then a logical valuation alternative is Price to Sales Ratios (PSRs). The current PSR at 2.2 is quite high. ADPT has had earnings growth quarter-on-quarter for years. However, it has still traded down to a PSR of 2 on many instances, in spite of this stellar growth. Now that we have some (temporary ?) earnings reversals, will it go lower than 2 ? (Note that the PSR will go lower if Symbios is integrated, but will this be low enough ?) Mark