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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Keith Fauci who wrote (3344)	1/25/1999 8:01:00 PM
From: RocketMan	Read Replies (2) \| Respond to of 41369

Trailing P/E is not a good valuation method for a hypergrowth company such as AOL. I don't know of a good valuation method, but professional analysts using discounted cash flow analysis set a target of around $200, with good upside potential from there depending on what else AOL might do to increase revenues. If you want to stick to P/E, though, you should look at forward P/E which, with earnings close to a dollar in a couple of years, would bring the P/E down to 150 or so. Still expensive, there is no question AOL is an expensive stock, but that is the price for growth in this market, and history has shown investing in AOL to have been the right decision year after year. Present membership is around 17M, and that only includes those who pay a monthly fee. There are several times that who use AOL by entering through other portals. AOL has good performance, and continues to be the leader with those who are new to the internet and those who want a simple interface.