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Technology Stocks : Gemstar Intl (GMST)
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To: Eric Jacobson who wrote (780)11/11/1999 2:25:00 AM
From: Glen2  Read Replies (1) of 6516
 
$50 Billion: How it was derived.

In the report that BBRS published early this morning,
Michael Graham builds up the $50 billion as follows:

Number of units (in millions 30
$ per unit, per year 100
$ of revenue $3,000
Operating Margin 55%
Operating Income $1,650
Tax Rate 40%
Net Income $990
-----
P/E Multiple 50x
Implied Value ($'s in 000's) $49,500

Graham rounded from 49.5 to $50 Billion.

All the best, Glen
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