I was hoping for a big earnings surprise, but obviously we didn't get one. Still, Quidel's report was excellent. I did notice some positives when I compare Quidel's actual report with Cleary Gull's 2 April 1997 report by Jeffrey Holmes:
Sales: Quidel's actual 4QFY97 sales of $12,243,000 were 9% above Jeffrey's forecast of $11,269,000.
Net income: Quidel's actual 4QFY97 net income of $1,343,000 was 10% above Jeffrey's forecast of $1,212,000.
Shares used in computing shares outstanding: Quidel's actual 4QFY97 23,354,000 shares were 4% less than the 24,200,000 forecast by Jeffery. And considering Morgan Investment Corporation exercised 1,692,087 shares during Quidel's fourth quarter, it appears Quidel bought back about 700,000 shares (23,354 - 22,374 - 1,692 = 712).
FY97EPS: Quidel's actual FY97EPS is $0.16; Jeffery forecast $0.15.
One common method of determining the present value of a stock is to multiply a company's year out forecast earnings by a reasonable P/E. A generally acceptable P/E is one in which the P/E multiple is equal to the company's earnings rate of growth. Jeffery estimates Quidel's three to five year EPS growth rate to be 40% per year, and, assuming his forecast FY98EPS of $0.26 is correct (his forecasts have been below actual), then I figure Quidel's stock should be selling for about $10 today ($0.26 X 40 = $10.40).
Patience will be rewarded!
Mike |
