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Technology Stocks : Altaba Inc. (formerly Yahoo)
AABA 19.630.0%Nov 6 4:00 PM EST
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To: Danny who wrote (23013)7/15/1999 7:15:00 PM
From: Jeff Dryer  Read Replies (1) of 27307
 
>AOL is just as overvalued as it was last July. People who sold AOL
>before the Oct correction may have had a brife 2-3 months congrat to
>themselves, but are most likely regret that decision today after
>watching AOL going up another 200%.

Last July, AOL was selling for about $30/share. Based on today's shares outstanding of 1.28 billion shares, AOL's market cap was $40 billion in July 1998. In the Sept. '98, Dec. '98, Mar. '99 and June '99 quarters, AOL will generate about $400 million in Net Income for the year.

Therefore, back in July 1998, AOL's forward P/E on the next 4 quarters earnings was about 100.

Now, I estimate AOL's forward P/E is about 350 and revenue and earnings growth will likely be slowing to the 50% level from 100% plus.

My conclusion is that AOL is about 3.5 times overvalued compared to one year ago. I will need to double check all these numbers but I am pretty certain the numbers I'm using here are accurate.
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