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Technology Stocks : OnSale Inc. -- Ignore unavailable to you. Want to Upgrade?

To: j_b who wrote (1356)	7/22/1998 1:01:00 PM
From: StaggerLee	Read Replies (1) \| Respond to of 4903

>>If ONSL doubles their revenue...they will break even How do you figure? Doubling their revenues means $320M of revenues. An 11% margin means 35M, which is approximately equal to their PRESENT SG&A expense annualized. But SG&A has been increasing as a drastic rate the last 4 quarters: $2.8M, 4.1M, 6.0M, and $8.4M. SG&A is 21% of revenues now, versus only 15% a year ago! What makes you think the brakes are going to be suddenly applied here? The fact that analysts think ONSL will be profitable next year makes buying ONSL a very risky proposition here. I would never buy a company's stock when very basic analytical models prove the analysts to be wrong. These days, there's nothing like missing a quarter to send a stock into the tank. Time will tell.