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Interesting. It's the long-term growth rates I look at. In that light, MSFT is comparable to ORCL at 25%. You can see why I don't like SUNW, the P/E's as high as ORCL and yet the growth rate's 20%. QCOM has a 35% rate. Looking backward, MSFT has outperformed ORCL and SUNW, at 40% growth versus 35% for the other two. QCOM has 60%. Ah, but what have you done for me lately? The numbers for next FY tell the tale, MSFT 15%, ORCL and SUNW 25%, QCOM 30%. The past is just that, past. The long-term rates are guesses, just look at the spread between high and low estimates. The one figure people have reasonable confidence in that's still relevant is the growth for the next year. You can see how this then correlates to the P/E ratios of 60 for MSFT, 150 for QCOM, and 100 for the other two. For fun, I threw in SEBL. 40% growth going forward, P/E 170 at today's price. The market pays for growth. |
