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Technology Stocks : DBII Digital Biometrics, Inc

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To: Vincent Vega who wrote (107)1/31/2000 9:51:00 PM
From: Vincent Vega  Read Replies (1) of 118
 
A quick note on valuation:

Assume revenue grows 50% per year for the next 2 years (maybe conservative given 96% ttm growth). This gives us revenue for the year ending 9/30/01 of $50.0 million.

Assume net margins of 15% achieved through some economies of scale (realistic). This gives us 2001 Net Income of 50*0.15 = $7.5 million.

Discounting at 20% gives us PV(2001 EPS) = 7.5/16.2/1.2 = 0.39. Assigning a fairly conservative multiple of 30 gives a per share price of 30*0.39 = 11.56.

VV
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