C-Cube Message Board - Msg: 10569382

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Technology Stocks : C-Cube

CUBE 36.76

-0.5%

12:47 PM EST

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To: Stoctrash who wrote (43200)	7/19/1999 5:06:00 PM
From: Nevin S.	Read Replies (1) of 50808

From CSFB: C-Cube Microsystems (CUBE-$35 7/16-Cap$1.4B-Buy)Charlie Glavin CUBE reports in-line; Raising PT to $40 FY99: $1.26 (from $1.27 (rounding)); FY00: $1.45 * CUBE reported in-line with our 2Q98 $0.28 est, given the strength of DiviCom and STB segments. Momentum at both these segments helped to offset the anticipated decline in the VCDmkt. * GM came in at 55.5% (vs. 54.5% in 1Q99) due to mix shift toward higher margin segments. DiviCom rev represented nearly 50% of total rev, growing 22% Q/Q. * Going forward, we expect that the slower seasonal pattern historically witnessed in 2Q will be mitigated as DiviCom and the STB business continue to grow as a % of rev and as increased DVD sales take off, displacing the more volatile VCDmkt. * We modified our 1999 EPS estimates slightly - rounding down a penny for 1999 to $1.26. EPS for 2000 remains $1.45. Based on a more stable semi business and strong DiviCom support, CUBE deserves a slightly higher multiple of 25-30x and an increased price target of $40.

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