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

To: jach who wrote (24253)	4/9/1999 7:14:00 AM
From: Zoltan!	Read Replies (1) \| Respond to of 77397

>><I wonder how he thinks he can make up such numbers - "next year's earnings about the same as CSCO " - and expect anyone to take him as anything> not making up but reality; 3COM next yr's estimate about $1.50, CSCO next yr's estimate a little over $1.60. So, they're closed. Are you still zonked out totally that you could not even see the simple numbers. Remember your title that was given some time ago "Zonked Zoltan!" (ZZ!, or the Double Z). We've got your number, Simpleton. Learn to speak English. "Earnings" and EPS are not the analogous - though it's hardly surprising that you can't distinguish between the two. Cisco's earnings next year will be at least four times COMS. Your "analysis" is just about the worst I've ever seen. What you lack in insight you more than compensate for in both volume and frequency. JA, the uneducated tool.

To: jach who wrote (24253)	4/9/1999 7:49:00 AM
From: drew myers	Read Replies (1) \| Respond to of 77397

COMS eps next year is a consensus of $1.32; CSCO eps next year is $1.83. A popular model for valuing stocks is called the multiplier model. Essentially you "multiply" the P/e times next year's estimated earnings. The tricky part is how to estimate the multiplier: historical P/e ratio; a cross-sectional regression model; or the Gordon Model. Using a very simple P/e from today's price and this year's estimated earnings model: COMS is at 25.43 while CSCO is a whopping 142.74 So, on the surface, it would appear that COMS is incredibly underpriced compared to CSCO (or vice versa). However, and here's the big however, the multiplier approach (like most models) is often inaccurate in valuing a stock when market conditions are constantly changing. Jach, they are constantly changing. CSCO is in a much different market than COMS. Comparing them is fundamentally flawed. Fundamental analysis is tough to do with COMS because of their horrible record with Wall Street. Fundamentals are not driving the stock right now. In six months or more, they should be again if the company is acquired, merged, or reorganized (plus a major shakeup among executives). CSCO on the other hand is difficult to value with traditional models because it is a true GORILLA that deserves higher multipliers. Please take a look at some real data. Comparing earnings per share between the two companies and drawing conclusions is inaccurate...and dangerous.