>Tellabs' primary competitors include ADC Telecommunications, Alcatel, Arris, Ditech, Lucent Technologies, Newbridge Networks, Nokia Telecommunications and Nortel. You may notice that each of these companies trade at a higher premium yet have lower growth rates over the last five years, and lower growth rates projected over the next business cycle.
>This will bring investors to the intention that TLAB is trading at only 29 times 2000 earnings and the company has grown earnings 40% on average over the last five years. Simply, TLAB offers exceptional value within its high growth industry.
falling.short, indeed.
i realize that you're merely the messenger here, brien, however this latter (bolded) issue seems largely irrelevant. i hope the author accurately did his due dilly on the former point, cuz i have a very hard time believing that Nortel trails Tellabs' projected growth rate over the next business cycle. and it's certainly not true if one isolates the transmission space (NT is growing its optical bidnez at ~100%).
at roughly $47.50 a share and a trailing EPS of $1.39, we're at a P/E of 34.2. given this year's higher tax rate which is expected to trim $0.05, the consensus EPS is hovering around $1.66. that's a forward P/E of about 28.6 on earnings growth of 19.4%. TLAB grew at an average of 40% over the past five years, huh? as miles davis might blow:
cdnow.com
(so what?)
in addition, as you're pro'ly well aware, this march quarter is impacted by higher operating expenses associated with the R&D ramp and increased marketing; the facility in India; the pricey TITAN 6500 trials; and $0.01 dilution due to the Salix acquisition.
of course, we can put a silver lining around these as they're largely long-term positives. i guess my point is that TLAB needs a catalyst and may likely be flat until after the march report -- guided down to $0.30 -- or even much later when/if the TITAN 6500, Everest or Salix telephony announcements begin.
(hence, the uncertainty and 2H anticipation.)
cheers,
-chris. |
