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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: jach who wrote (20130)	12/26/1998 11:50:00 PM
From: JC Reddy	Read Replies (3) \| Respond to of 77400

A Question about CSCO valuation. CSCO is at $94/share which makes current P/E of 100. Consensus growth rate is about 25%. EPS for July '00 is 1.82. This makes 2-yr forward looking P/E of 52. I agree, CSCO is a low risk growth company and will keep growing at a consistent rate. But don't you think CSCO has a risk of correcting to current P/E of 50 which will make it a $48 stock? Especially when times are bad. Last 5 years it had a growth rate of 49%. This year 26% and in the next five years 25%. Reminds me of PSFT which was a wallstreet darling until one day it was realized that the growth is slowing (still at 33% with a P/E of 30). Not comparing CSCO with PSFT since CSCO business is probably a little more sound, but the analogy does make sense in general. All it takes for CSCO stock to tank is one mildly bad quarter, don't you think? I am interested in putting my money here, but am a bit scared. Any comments?

To: jach who wrote (20130)	12/27/1998 12:06:00 AM
From: Jorj X Mckie	Read Replies (1) \| Respond to of 77400

jach, There are many thing for you to learn over the course of your life. Hopefully, you will choose to grow rather than stay stuck in a mire. JXM