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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: MaPari who wrote (4064)	1/27/1999 10:42:00 AM
From: William F. Wager, Jr.	Read Replies (1) \| Respond to of 17183

Interesting article from today's WSJ.. The company's stock-market value has doubled in about the past six months to $51 billion, but Chief Executive Michael C. Ruettgers says EMC still isn't getting the respect it deserves. In an interview, he said comparably performing technology companies are being accorded price/earnings ratios of about three times their growth rates, which would translate into an $80 billion market value for EMC. For the quarter, EMC's hefty 22% net profit margin -- or earnings as a ratio of revenue -- was in line with fast-growing technology companies such as Intel Corp. and Cisco Systems Inc. EMC is pulling away from rival International Business Machines Corp. in the $10.1 billion market for stand-alone storage systems that use disk drives. In 1998, EMC's market share rose to 32%, from 28% the year earlier, while IBM slipped to 20% from 24%, according to researchers at Dataquest Inc. Mr. Ruettgers attributed sales growth to companies that are replacing multiple internal storage systems with one big box. EMC also got a bigger-than-expected boost from sales of software that enhances its devices. Software sales grew 175% to $164 million in the quarter. Mr. Ruettgers said the company was poised to continue topping 30% growth in both revenue and earnings in 1999, helped by strong hardware demand from providers of Internet service. The sanguine outlook prompted many analysts to boost estimates. Gary Helmig, of SoundView Technology Group, raised his 1999 revenue estimate to $5.18 billion from $5.05 billion. Mr. Helmig increased his net income projections to $1.1 billion, or $1.99 a diluted share, from $1.04 billion, or $1.91 a share.