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Rational Software Corp. (RATL) Message Board

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  • kknauber kknauber Feb 11, 1998 1:53 PM Flag


    I've also bought RATL because of their great market position and strong belief in the category. What I don't understand is why it has such a low price to sales ratio.

    MSFT: 16
    RATL: 4

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    • I don't understand Rational low price ratios either.
      When compared to software industry averages,
      P/E,price/sales and price/book all look low.

      RATL Ind.Ave.
      P/E 39 50
      Pr/Sales 4 12
      Pr/Book 4 15

      RATL earnings growth from 3/98 to 3/99 is .35 to .55
      or 57%.RATL is currently trading at only a 25 times
      next year (3/99) earnings.

      When upgrades come, this stock has a great upside

      • 2 Replies to Kfaxx
      • ratios are out of whack with other vendors due to the volatility of the stock. Suprises typically occur to the downside with RATL, so you have to hedge your bets . . . to the downside.


        From a review of the data, it seems to me that the RATL P/S ratio is somewhat high when compared to its ranking among the analysts. I wonder if this is saying that the investors are more optimistic about RATL than the analyst.

        From the below site, I pulled off this data today to study the P/S matter. In addition to the original comparison group, I included MSFT, PLAT, and the top ten and bottom ten from the list at this site.

        Research by Industry - Computer Software
        target=new >

        Please note that this data uses trailing twelve months revenue and is therefore different from my original post.


        RATL 3.68 264 258

        SLCTY 3.81 21 250
        CAYN 0.58 51 NONE
        LGWX 2.66 47 269
        PLAT 3.24 555 58
        MSFT 16.0 13,100 152

        Note: *Lowest rank is 318.

        TOP 10 HAVING BEST Average Recommendation of ANALYST (the number shown is P/S ratio) - SAVLY 16, CMSX 4.4, PVSW 4.6, ABRX 13,
        IMRS 15, MMGR 8, NEON 4, PEGA 21, ACLY 59, CCRD 12

        BOTTOM 10 Average Recommendation of ANALYST (the number shown is P/S ratio) - QDEK 1.0, RENG 1.54, ROSS 0.69, SMSI 2.0, SWEBF ??, STAC 3.3, WALK 2.8, AMSI 0.90, INSO 2.4, TEAL 0.81

    • So so day, but there is a big party going on the IFMX board right now. Hey Mike C. are you alive?

      • 1 Reply to eyarci
      • Isaac,
        Still alive, never sold any RATL, firmly believe future is up. Expecting to break 15 barrier within 2 months. I own 5 times
        as much ASND, so that kinda monopolizes a disproportionate amount of my time. I hear SDWest was cosmic and RATL really shined.
        It seems we are slowly climbing back to health and RATL remains on the ball. Remember, it hasn't even been 4 months since
        Turnaround tuesday where we were at 7 1/4 (I know!). We have come very far and still have far to go. I feel good about RATL and Levy.
        Mike Cammarata