Re : "nagging" fears that maybe JDSU is "ahead of itself" on a price to sales ratio basis right now.
According to my favorite source of company information (Hoover's Online) hoovers.com (yes, I am a HOOV shareholder) ... revenues for the most recent quarter for JDSU were roughly $230 million.
Annualized (which assumes ZERO growth), this would be about $1 billion.
The SI "profile" for JDSU gives it a market cap. of about $42 billion (based on yesterday's close of $240).
So, we are at a price to sales ratio (P/S) of 42, assuming no growth.
If you dare to assume a doubling of JDSU's sales pretty quickly (not terribly unreasonable (I believe), given recent history), then you've got your P/S down to 21.
One of (in my opinion) the all-time stupid, over-priced, over-owned, over-loved, incredibly SLOW growing companies out there (Coca-Cola) had a P/S of around 20 a few years ago (when Wall Street was even more in love with it than right now).
If JDSU has as bright of a future as seems entirely logical (given the business they are in, the relative "early-ness" of that business, and JDSU's prominent role as a "player" in that business), I think the P/S ratio is NOT high.
Jon. |
