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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Sycamore who wrote (12169)	10/22/1998 10:26:00 PM
From: Hardly B. Solipsist	Read Replies (3) \| Respond to of 14631

I don't get the rationale behind the target of $12 -- I don't mean that I think that it's wrong, just that I don't see any explanation there. Do people expect sales/earnings/whatever accounting measure you want to use to go up at a rate that supports a really high valuation of the stock, or do they expect earnings to just get high enough? Generally a company that is growing year to year at 25% with the kinds of margins that database companies typically have can't command a P/E above 30, which means that IFMX would have to make 40 cents a share of the right kind of money to get a $12 valuation. They'll have to grow more like 50% to get to that level in 15 months, although they can probably cheat a little and grow consulting enough to make up the difference if they get close (which will depress the P/E below what you'd expect for 50% growth). My question is, do IFMX bulls agree with this vague picture (and hence expect growth like this), or do you have some other model for valuing the company? By comparison, ORCL made $1/share in the 4 quarters including the last full one, has had problems that are minor compared with IFMX (they missed one quarter by cents vs. losses and accounting voodoo and a big personnel shakeup), has what appears to me to be even more promising technology, is the market leader in their sector, and they still haven't gotten back to a 30 P/E in over a year.

To: Sycamore who wrote (12169)	10/22/1998 11:32:00 PM
From: Jeff Meredith	Read Replies (1) \| Respond to of 14631

Melissa Eisenstat was the analyst that kicked off the slide from the 5s to 3s with her downgrade from buy to hold on Aug. 25th. The scuttlebutt was that she misread the lost Egghead deal as IFMX data warehousing customer exodus to Oracle "the other evil empire" (I have since heard more than once that the company does not know of a single instance of such a defection). I believe her recommendation is still: hold. Jeff P.s. I thought it was interesting that a big chunk of the slide occurred the day before she issued the downgrade. I'm not a big CIBC fan.