CheckFree Holdings Corp. (CKFR), the next Dell, Intel? Message Board

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Technology Stocks : CheckFree Holdings Corp. (CKFR), the next Dell, Intel?

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To: Benny Baga who wrote (13103)	1/12/2000 4:44:00 PM
From: noiserider	Read Replies (1) of 20297

<<A '20' multiple? FDC has a 32 multiple and even Warren Buffett considers them undervalued >> I think you've identified the big variable. As you mention, FDC has a multiple of 32 when their growth rate is fairly low at 7% per year. It's a guess what CKFR's growth will be in 2004, but it's probably closer to 25% than 7%. In fact,the SSB model uses a revenue CAGR of 25% per year from 1999 to 2004. A better company for comparison might be PAYX. PAYX has the same steady revenue stream from payroll processing that is relatively immune to economic conditions. Operating margin=17%; Growth=25%/yr; P/E(ttm)=64. That gives CKFR a 12 month price target of $128 even without the revenues SSB forgot to include.

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