The New Qualcomm - a S&P500 company Message Board

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

QCOM 159.62

-3.9%

3:59 PM EST

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To: Rocket Scientist who wrote (4421)	12/22/1999 12:07:00 PM
From: Jeff Vayda	Read Replies (1) of 13582

RS: Justified levels? The Q produces a product which is in demand for its ability to enhance another's product. What is that worth? Isnt that what AOL and Yahoo do as well? Are they overpriced? (You betcha they are, but they have been so for how long? At some point if the thesis is not supported, you have to throw it out.) The key difference is that the Q has produced a unique product which others have tried to copy. They have either been unable to duplicate the technology outright or have been unable to duplicate it economically. The Q is willing to sell at a price point which makes it smarter to buy the technology from Q. How much better can it get? The profits inputted for the P/E (trailing or leading and the different multiples as a result) are based on a current minority market share.(Just for ease of concept, limit the exercise to handset ASICs) Given the increase in that market share and the demonstrated increase in the replacement of components as technology accelerates, the future royalties are going to increase. Add in the increased margins with the release of the low margin handset production capacity and things get even better. I'm sure others are putting out more detailed analysis, just my two cents worth. Jeff Vayda

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