not a happy shareholder, page-2

I think there's a few things to consider about the sell-off.

NTC was undervalued for a very long time, even when they continuously announced and eventually met their forecasts in FY09, so it seems the market prices in additional risk for this company. Maybe the dependency on the large Telstra contact? So I'm not surprised to see it go down to an FY10 P/E ratio of between 7-9 based on latest forecasts.

Also, note in the latest announcement that they have brought forward some R&D costs in to the first half which would have an effect on their profit margin. It's also interesting to compare the separate half year results and forecasts (using the high end) from both financial years:
FY08/09 1st half: Revenue = $19.4m, EBITDA = $0.6m
FY09/10 1st half: Revenue = $27.0m, EBITDA = $0.5m
Margins of 3% and 1.9%

FY08/09 2nd half: Revenue = $59.0m, EBITDA = $5.5m
FY09/10 2nd half: Revenue = $52.0m, EBITDA = $5.1m
Margins of 9.3% and 9.8%

So for some reason, they generate more revenue and become more profitable in the 2nd half of the financial year.

It's also worth noting that the FY10 full year forecast revenue (at the high end) would have been 17% higher if the AUD had of remained the same as last year.

The share price has gone from 15c at the start of August to a 51c high only a few days ago, so that's a 240% increase in a little over 3 months. A good correction to what was an undervalued stock but it's now at a much more reasonable P/E ratio and I'd expect it to settle in the 40's.

I agree entirely with your point on their profit margin. If this can be improved, then I'm sure there's a realistic change of this stock reaching $1 in 12-18 months.