<<isn't 100pe a little too high or does anyone think they'll do better then $6.>>
I would answer the question in two parts:
A) As a voice only company envisioning no new businesses other than a normal CDMA expansion, 100pe is too high.
B) As an emerging wireless data technology provider, both fixed, mobile, and both(whichever you want), I would say the PE must be forward looking. The analogy I would provide is the drug company of your choice(SYN in 60's, AMGN in 80's). If they had received approval for their initial blockbuster drug, but had not shipped it yet, how important would you consider trailing earnings. Minimal, right?
Ok, well then how should we value the trailing earnings when they do not include data revenues. I don't have the answer, but clearly this price move comes on the heals of the comments during the earnings CC and the HDR CC.
To summarize, I think you cannot use trailing earnings when the business model is changing this drastically. Forward earnings are really difficult to predict and subject to constant revision, but here we are.
Respectfully,
Cooters |
