The analysts have, once again, raised their estimates. According to First Call, four analysts believe that 3rd quarter earnings will range from 15 cents to 17 cents, apparently with two analysts estimating 16 cents. WIND already is comfortable with those estimates, meaning that earnings for the 3rd quarter will be 18 cents, plus or minus a round-off error that never seems to happen.
The fiscal year currently is estimated at 61 cents on average, with estimates ranging from 60 cents to 62 cents. Consequently, the best guess now for the fiscal year total is 66 cents.
The estimates for FY 1999 now range from 75 cents to 90 cents, averaging 81 cents, which corresponds to a 33% year-on-year increase over this years estimated 61 cents. However, I suggest that, before you begin to think of WIND as a mere 33% earnings grower, you should recall that I2O royalties still are not included in next year's estimates. (Please understand that calling 33% earnings growth "mere" is done strictly tongue-in-cheek.)
How much might I2O add to earnings in FY 1999? A ballpark guess is 10 million units at $1.50 average, less 40% taxes, or about 30 cents net after-tax addition per share. This means earnings growth in FY 1999 should return to the 75% plus category from a multi-year low this fiscal year of about 50%. Earnings growth should continue at about the 75% rate at least through FY 2001.
If WIND is able to achieve this kind of consistent high growth (which seems immanently possible), then the stock will be worth at least 10 times the current price at the end of five years.
Oh, and one of two analysts with only buy recommendations on WIND raised the recommendation to a strong buy.
Allen |
