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Rational Software Corp. (RATL) Message Board

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

    PRICE TO SALES RATIO COMPARISON

    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.

    PRICE TO SALES RATIO COMPARISON
    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
      potential.


      • 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.

      • RATL P/S LOW OR HIGH?

        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 >http://biz.yahoo.com/research/indgrp/comp_software.html


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

        ANALYST
        Recommendation
        TICKER P/S REV RANK*

        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.
        Later
        Mike Cammarata