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Technology Stocks : Dell Technologies Inc.
DELL 138.940.0%Dec 5 9:30 AM EST
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To: Sig who wrote (136544)7/14/1999 6:36:00 PM
From: Chuzzlewit  Read Replies (4) of 176387
 
Sig:

Many people are now saying that Dell's growth will be in the 30's. Those people have been seriously wrong in the past and will probably be wrong again.

It depends on what you mean by growth. If you are talking about eps I suspect that growth will be around 42% for the next few quarters (owing to share repurchase). If you are talking about revenue growth, I think growth will be in the low to mid 30's, and I think the current share pricing on Dell reflects those expectations.

The reason for lowered growth expectations is entirely a function of Dell's size. As Dell continues to emerge as the number 1 PC supplier there will be a diminishing market pie for it to capture. Ultimately, growth will be limited by the overall growth of the PC market.

Exactly what impact server-centric and web-centric computing will have is unclear at this point, but I am certain it will further limit Dell's growth on the desk top. Dell's current thrust seems to be to capture more of the retail market. I am not sure that this is the driver needed to sustain the kind of growth we've seen in the past. I think that in order to continue the kind of growth we've seen over the last decade Dell needs to find a new business in which it can adapt its exemplary business model.

This is not to say that I am bearish about Dell -- I am still long and intend to stay so. I am trying to be realistic about Dell's prospects going forward.

TTFN,
CTC
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