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Technology Stocks : Newbridge Networks

NN 14.21

+1.7%

Nov 28 9:30 AM EST

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To: New Economy who wrote (12961)	8/24/1999 11:01:00 PM
From: schlep	Read Replies (1) of 18016

SWAG- From release: 12% sequential Q2Q growth. Lets compound and extrapolate: WAN 12% per quartuer compounds to 57.3% annual growth. This growth is on 72% of their business. Multiplying out, this gives 41.25% growth on total dollars just from WAN portion. Let's assume that remaining 28% of the business combined with reduced operating costs will give 25% annual growth. So this provides another 7% growth of total dollars. Combine 41.25+7 = 48.25% annual growth. Assume $0.96 earnings estimate is accurate for 4/30/00, you then get next years EPS (4/30/01) of $1.42! Next, assume NN regains some credibility with the street and therefore some P/E expansion to better match their 48% growth rate (let's conservatively give it a 40-44 p/e which is less the 1/2 of CSCO's p/e) and you GET: Price TARGET: US$56-$62 Of course plenty of upside with an even higher p/e. cleaning my chin from the drool.... -schlep

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