Is TOTAL SERVICE SYSTEMS (TSS) overvalued ? Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Is TOTAL SERVICE SYSTEMS (TSS) overvalued ?

TSS 133.27

-1.0%

Sep 17 5:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: chester lee who wrote (23)	4/8/1997 12:29:00 PM
From: Q.	of 43

7 cents beat the consensus analyst estimates of 6 cents, which might have something to do with why the stock went up today. And clearly the co.'s business is doing just fine. Valuation, however, is what is most important here. At an eps run rate of 7 cents per quarter, the stock is trading at a p/e of about 100. Compare that to the analysts' highest estimate 36% 5 year growth rate, and you see that the stock is trading at a PEG of at least 2.7. Even higher. at 4.2, if you use the mean estimate of 23.8% growth. Suppose for the sake of optimism that the eps does grow at 36% annually. After 5 years, the eps would be 32 cents per quarter instead of 7 cents. With a multiple of 15X one year's eps, the stock would then be trading at 4 X 0.32 X 15 = $19.2. If it traded at a multiple of 20, then the stock would trade at $25.6. In other words, if everything goes right for the co. over the next 5 years, and if the stock trades at a multiple typical of the S&P500 then, the stock price would still go down between now and then. ======================= Here are the Zack's estimates of eps and growth rates: 3/29/97 WALL STREET ESTIMATES MEAN HIGH LOW NUMBER MEAN CHG EST LAST MNTH ($) FISC YR END 9712 0.39 0.40 0.38 4 0.00 FISC YR END 9812 0.48 0.49 0.47 2 0.00 QUARTER END 9703 0.06 0.07 0.06 3 0.00 QUARTER END 9706 0.09 0.09 0.08 2 0.00 NEXT 5 YR GRTH (%) 23.80 36.00 18.00 5 0.00 COMPANY VS INDUSTRY ---------- EPS GROWTH RATES -------- (CUR FY=9612) P/E ON LAST 5 YRS CUR/LAST NXT/CUR NXT 5 CUR YR ACTUAL (%) (%) (%) YRS(%) EPS COMPANY 20.8 44.4 27.7 23.8 95.6 IND: COMP-SERVICES 19.8 18.4 33.6 25.1 30.7 (T=143) S & P 500 12.0 5.3 7.4 7.1 18.9 ---------------------------------------------------------- COMPANY/INDUSTRY 1.0 2.4 0.8 0.9 3.1 COMPANY/S&P 1.7 8.4 3.7 3.4 5.0

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next