John and Chuzz,
Both of you make the point -- and I agree, that if Dell should report an earnings shortfall, the impact on the price of the stock may be slight -- provided investors see it as an aberration, not something suggesting slowing future growth.
Chuzz, my point was not that a .01 shortfall in EPS would necessarily be interpreted as flagging growth. I merely wanted to show that $.01 could mean a sharply lower stock valuation if it does. I wasn't making any implicit assumptions -- you must have been thinking of John. In several previous posts, John disparaged the significance of a $.01 shortfall. In so doing he assumed that the market considers all these things we have been discussing as aberrations (temporary component cost boosts, supply bottlenecks, the cost of being totally dependent on Intel for CPUs, etc.) They may well be just that -- aberrations, although at some point I would want to ask John a question.
John, how many more "one-offs" (i.e., disappointing qtrs) can Dell sustain before the market does see disappointing growth?
Geoff |
