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

To: Sonki who wrote (23828)	3/21/1999 3:08:00 PM
From: jach	Read Replies (3) \| Respond to of 77397

<revenues of US$8.46 bln, up 31% versus the previous year. Net income was at $1.88 bln> Very likley csco will not be able to maintain this type of net margin. IMO, absolutely not. With all the startups and large telecom companies, all wanting the same, margins and profits will drop substantially. CSCO has already mentioned in their FORM 10Q that margin will go down because of the revenue growing faster in the low end mkt. IMO, CSCO does not get this 20% net margin in Asia also. The high-end is shrinking and that is where the big margins are. So, imo, the net margin will likely drop 5% sequentially. Another key warning trend that can knock down the price in a big way when the mkt turns south is the exteremly high PE of more than 110+. Typical historical PE for CSCO was between 60 to 70 and that was for the last few years. CSCO growth during the last few years was the same and there is no significant chanegs in their grwoth rater as well as net margin. So, the increas in PE does not warrant the growth, unlike some of the Internet stocks. IMO, CSCO is overpriced, target price for bad mkt condition is 60-70$.