Compaq Message Board - Msg: 14323140

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Technology Stocks : Compaq

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To: Elwood P. Dowd who wrote (84608)	9/3/2000 5:57:21 PM
From: Elwood P. Dowd	Read Replies (1) of 97611

More from The Zoo.... Re: rudedog from SI by: kalpickles 9/3/00 4:32 pm Msg: 180929 of 180935 Rudedog: My price estimate is not much different from yours. I have a fairly simplistic model and it is based on Compaq delivering results per consensus estimates during the remaining quarters of this year. Currently the market seems to be affording Computer stocks an average TTM PE of about 54. I am assuming that this market mood will hold. Compaq's TTM PE is right at 50 based on current valuation. As a result, in the near-term I see little possibility for upward price movement, however, I would not be surprised at all if there were any upward (or downward) price movement given the multitude of market influences. If we get past the 15 of September and there are no earnings warnings etc, we enter into Compaq's quiet-period. I would expect that once we are there we should be in pretty good shape to make Qtr. 3 consensus. I am even hopeful that this quarter (in the period prior to earnings) is not marred by analyst mess ups like ML in Q1 and SSB in Q2. Compaq's current TTM earnings is 68 cents (See table below: Source MS investor). If Q3 earnings were to just match concensus numbers of $0.29, Compaq's TTM earnings after Q3 would improve to $0.89. I use $0.90 for easy arithmetics going forward. With the current market mood, Compaq's share price should edge towards $0.9050 (PE) or roughly $45. Compaq's fiscal year 2000 consensus estimate is currently at $1.07 per share and if they make Q3 and Q4 numbers, their actual FY 2000 numbers will be $1.11 per share. Carrying the same pricing logic forward into Jan 2001, Compaq's share price would extrapolate to $1.11 50 (PE) or roughly $ 55 per share. Earnings Per Share - Quarterly Results *******FY(12/00)FY(12/99)FY(12/98) 1st Qtr$0.19****$0.16**$0.01 2nd Qtr$0.22****$-0.10*$-2.33 3rd QtrNA*****$0.08**$0.07 4th QtrNA*****$0.19****$0.50 Posted as a reply to: Msg 180881 by rudedog_from_SI

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