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Technology Stocks : Siebel Systems (SEBL) - strong buy?
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To: syborg who wrote (3759)8/14/2000 5:34:31 PM
From: muckraker71  Read Replies (2) of 6974
 
syborg, I am curious -

<Personally I do not expect y/y increases to drop below 100% for at least two years.>

You say that you expect 100% y/y stock appreciation for at least the next two years. Now since SEBL is at the high end of the valuation curve (at about 190 times this year's earnings), PE expansion from these levels is probably not realistic or reasonable.

This implies you expect SEBL to grow revenues/earnings by at least 100% per year over the next two years? Do you really think SEBL can double next year and double the year after that? That means that in 2002, you project the firm would do about $6B (assuming about $1.5B this year, $3B in '01).

This assumes SEBL can continue running at full tilt for the next 24 months. I think this is possible, and I hope to see it, but I wonder if in the next 12-24 months, the firm will have slow itself down just a bit as it cruises past 5000 employees.

I don't see any major competitive threats to SEBL right now outside of Oracle (that's another story altogether), but as a shareholder, I want to see SEBL manage its growing pains as well as its growth.

Just out of curiosity, what you think about the question of scale? Personally, this was one of the reasons I left the firm. I didn't find that I enjoyed the work environment very much any more, and leaving some equity on the table didn't bother me that much.

Conclusion: I think if SEBL does slow down a bit, it will be a deliberate mgmt decision made to ensure the growth is manageable. Any thoughts?
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