How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 510.37

+1.4%

Nov 14 9:30 AM EST

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To: johnd who wrote (25782)	7/9/1999 2:43:00 PM
From: johnd	Read Replies (2) of 74651

Why MSFT may be cheap in relation to other market leaders - look at PEG. When Microsoft posts record revenues and earnings this Q, if it records 5.8Billion in revenues and 45c in EPS, it will be 80% growth in EPS with a 40% growth in revenues. When EPS is growing at 80% rate, the stock could trade at a PEG of at least 1.0 OR 80 * 1.45 => 116. Even if you consider year over year growth rate, we are talking about 63% growth in EPS. Institutions may think this trailing PE on this stock in relation to similar companies is too low? What is interesting is CSCO is at a PEG of 3 and DELL is at 2.0, SUNW is at 2.5. MSFT is just around 1.0.

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