Richard,
Welcome to the Quidel thread.
I'm sure any research and comments you post on Quidel will be appreciated by all who read this thread.
Mr. Frankel stated in his conference call that he expects sales growth to increase 20% to 25% from FY97 to FY98. Mr. Frankel's forecast significantly exceeds Jeffrey Holmes's forecast in his 2 April 1997 report on Quidel. Jeffrey forecast a 16.6% year to year increase in total product sales.
If Mr. Frankel's forecast proves true, this is what we'll see using 20%:
$41.9M (FY97A sales) X 20% = $8.4M;
$8.4M X 50% (profit margin) = $4.2M (profit increase over FY97);
$4.2M / 24M shares = $0.17 (EPS increase over FY97 EPS);
$0.16 (FY97EPS) + $0.17 (EPS increase) = $0.33 FY98EPS.
$0.33 is 27% higher that Jeffrey Holmes's forecast of $0.26.
A fair stock price is based on a one year out projected earnings, so this is what we could see next year at this time:
$0.33 EPS X 30 P/E X 1.4 (Jeffrey Holmes's estimated earning increase FY98 to FY99) = $13.86. A 30 P/E is conservative for a company that is increasing earning at 40% per year. When the bio-tech sector strengthens, Quidel could easily sell at a 40 plus P/E.
A few comments concerning Howard Schellenberg's posts:
Howard's post #808: "Also, note that CellPro, the loser in a very similar lawsuit with BDX, is now trading above $8.00 a share. They were about at $5.00 when the lawsuit was settled. Just goes to show you how these are one-time events."
Mike's comment: Following the settlement of a patent dispute, the stock price for the vast majority of companies increases, I expect that when the DB suit is settled, Quidel's stock will climb significantly.
I disagree with your statement: "CellPro, the loser in a very similar lawsuit with BDX." The only similarity is that both suits are for patent infringement. The DB suit against CellPro involves a much different patent infringement claim. The CellPro suit concerned the use of a SPECIFIC antibody in CellPro's CEPRATE(R) SC Stem Cell Concentration System.
Howard's post #544: "Late Friday I found out that in March Quidel sold $8 million in just strep tests in the US. Obviously, this is a blockbuster. I struggled with whether or not to share it with the group. I do not believe it is insider information, since it was given freely by a company employee without my asking."
And Howard's post #548: "He SAID 8 million in the month of March. I asked him twice. But perhaps he made a mistake and meant 8 million in the quarter. I doubt he made that mistake but it wasn't a conversation I had with him as an investor. We will see shortly when quarterly figures are released."
And Howard's post #775: "Remember my post when the sales rep told me they sold 8 million in strep tests alone in March. Well, everyone on the thread said that couldn't be true. What if it was?"
And Howard's post #786: "Buy now at $3.30 or wait.....we will all see very soon in the morning who was right! How exciting for all of you!!"
Mike's comment: Quidel's FY974Q Total Product Sales: $12,243, of which Quidel's entire infectious diseases category sales are approximately 30%.
Mike |
