Teri, some thoughts on ATML:
My problem with ATML is that I don't know much of the story (products, competition, management, etc.), but I have perused some numbers. With that being said, here's what I think.
Seems everything depends on next quarter's (June 97) results. First Call says .38/share for the June quarter, and that shouldn't be hard to beat - I'm optimistic they'll at least improve upon last quarter (.38/share). Right now earnings for year-end Dec. 97 are expected to be down 19% from 1996. Hmmmmm, this is from a company that has grown (5yr historical growth) earnings at 86% and revenues by 70%. What went wrong last quarter? Again, I don't know their story. Maybe someone can give us the quick and dirty on that.
First Call estimates a long-term growth rate of 28%. So, if the market could become comfortable with a multiple in the mid 20s and if ATML can climb back to '96 levels ($2.01/share) for 1997, then we should see this stock in the 50s (25 X $2.01). Of course, this stock isn't going anywhere if earnings don't improve throughout the year. At a multiple of 14 and 1998 earnings estimates of $2.15, it's only worth $30.
Some measures that seem to paint a picture of ATML sitting on the low side are:
Hist. Range, Current
P/E 11-45, 14
Price to book 1-6.1, 3.3
Price to sales 1-5.7, 2.47
Price to cash flow 5.7-20.8, 8.9
Hey, if you bought at 22 7/8, you've already done well. Seems to me like you might do even better. If I get the courage, I'll join you on the bus.
Andrew |
