PMCS Thread: CSFB analysis of PMCS.....
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PMC-Sierra (PMCS-$174.50-Strong Buy-Cap-$ 13.7 B)
Excellent!: Don't Get Bored With Repetition, as PMCS Beat Estimates Again, posting 4Q99 EPS of $0.29.FY00E: $1.50 (was $1.30); New FY01E: $2.20
· Reporting $0.29, PMCS beat consensus of $0.27 –again – driven by 13% Q/Q revenue growth to $81 mm, owing to strong 16% growth in Networking business (especially from the access line).
· Design win rate accelerated to 1500+ (from 1000 in 1998) coming primarily from COMET, FREEDM, the Spectra 155, and SUNI chipsets. Over 50% of revenue is still from products introduced before 1996.
· PCMS further augmented it design talent by acquiring Ireland-based Toucan, a previously funded design partner (should be neutral to P&L).
· PMCS explicitly stated that it felt no Y2K effects (e.g., inventory builds) and instead has been seeing order pull-ins, even in March. Book-to-bill was solidly above 1 while bookings and backlog were “Excellent”.
· We reiterate our Strong Buy, increasing 2000 estimate to $1.50 (revenue of $432 mm) and introduce 2001 EPS of $2.20 ($652 mm in revenue). We raised our price target to $200. Plenty of upside remains. |
