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Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: robert duke who wrote (12671)	12/21/1998 6:40:00 PM
From: RocketMan	Respond to of 13594

How about comparing Price/Sales: AOL 17.47 MSFT 23.13 YHOO 300.86 ATHM 915.09 or 5-year earnings per share growth rate: AOL 86.52 MSFT 36.72 YHOO, ATHM N/A Of course, EPS is not as good as MSFT's: MSFT 2.04 AOL 0.30 YHOO -0.18 ATHM -2.83 AOL's growth is faster than MSFT's, and selling at about the same ratio to sales. AOL still has a long way to go to earn MSFT-type numbers, but the reason the P/E is so high is that investors are betting on the growth rate eventually getting the earnings to that level. And this is historical data, not taking into account the Netscape, Sun, Dell, or Latin America deals. OTOH, it also does not take into account Y2K or other potential torpedoes out there, but that is why investing is risky.