WCOM Message Board - Msg: 12707842

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Technology Stocks : WCOM

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To: JM who wrote (5811)	1/28/2000 6:35:00 AM
From: Robert Scott	Read Replies (3) of 11568

Market Cap to Sales (most recent reported quarter) & Revenue growth rate: WCOM/FON (w/o PCS) 3.14 14.5% Q/USW 3.53 10% BEL/GTE 2.57 9% SBC 2.58 8% T 2.46 6% BLS 3.17 8.3% GBLX 10.5 8% Based on this, GBLX looks grossly overvalued in relation to its peers, followed by Qwest. WCOM/FON and BEL/GTE look the most reasonably priced and they are the strongest in their respective markets - so it looks like they are being pulled down by their peers. If you say that most of these are reasonably valued, it appears that WCOM is undervalued. Take BEL/GTE and use the lower growth rate for WCOM/FON (13.5%) and you get a 50% improvement in revenue growth with WCOM/FON ((13.5-9)/9). This would equate to a market cap to sales of 3.8 which is not out of skew with the higher growers and you get a total market cap of 214.7 (WCOM/FON) or a market cap (evenly distributed between WCOM & FOM based on market caps) of 145.15 for WCOM and a share price of $51.125. Using the 15.5% growth rate, the share price would be $59.52. As such, WCOM is between 21% and 41% undervalued relative to its peers. Using any of the other telcos would even be better for WCOM. So WCOM continues to be the best investment in the sector.

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