The New Qualcomm - a S&P500 company Message Board

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Technology Stocks : The New Qualcomm - a S&P500 company

QCOM 170.90

-1.3%

Nov 7 9:30 AM EST

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To: Art Bechhoefer who wrote (3532)	11/23/1999 9:28:00 PM
From: Stu R	Read Replies (6) of 13582

Art: I think you misinterpreted the post. Cena used a 30x multiple of revenue (2.5 billion) to arrive at a market cap of 75 billion. Now do you think it is out of line? I don't believe a multiple of revenue is an appropriate way to value a company and therefore think his target is not to be given any weight other than to indicate his very positive view of the company. A quick check of the Market Guide ProVestor Report indicates the following price/sales ratios: LU 6.2 NOK 8.2 NT 5.2 ERICY 3.5 MOT 2.4 TLAB 14.5 and interestingly we have an actual comparable market transaction for a 100% interest. INTC just purchased DSP for a price of 9x sales. So what companies was Cena using in arriving at a 30x revenue valuation figure? Does anybody know? I am not saying that I think QCOM is overvalued, but I think prospective earnings and cash flow growth are what should be looked at to determine value rather than simply revenue. Stu

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