Hello Voltaire,
Read on RMBS earnings:
messages.yahoo.com
(updated with analysts new higher earnings estimates)
NOTE #1: Also the numbers below do NOT take into account ANY POSITIVE OUTCOME FROM THE LAWSUITS. So there is an additional huge upside to these numbers when Rambus wins.
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I will not bother you with what ifs, hype and what will actually happen that will drive RMBS to $500 by next year. What I will do is tell you how you can double your money, how all growth stocks are valued by the market and I will use the absolutely most conservative growth and earnings estimates for Rambus that you can possibly think of.
I don't care what high growth stocks you look at, they all are valued similarly based on the following formula: 2 x forward growth x forward earnings. Take a look at PMCS, BRCM, SDLI, JNPR, SCMR, CORV, CIEN, etc.. etc.. etc.. All their stock prices are just about based on the same formula: 2 x forward growth x forward earnings.
Now, take a look at the Yahoo research page here:
biz.yahoo.com
As you can see from the analysts estimates, the same analysts that have $200 and $165 price targets on Rambus, all Rambus needs for the year ending Sep 2001 is 47c and 180% growth from this year's 17c. The reason for that is: 2 x 180 x .47 = $170 a share. So that gives us a share range of $160-$200 +/- 10% based on those average estimates of 47c which represents 180% growth. (mind you Rambus will do much more than that, but stick with me for a second).
Now if someone were to tell you that here is a stock that if you buy it today you would double your money 12 months from now, what would you do? Where else do you get a better return than that and with a huge upside surprise to boot?
Now, how do we get to 42c by Sep 2001?
1Q Dec2000 = 9c (170% growth YoY)
2Q Mar2001 = 11c (170% growth YoY)
3Q Jun2001 = 13c (170% growth YoY)
4Q Sep2001 = 14c (170% growth YoY)
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Total = 47c
What does 47c represent? $45million earnings or about $11 million per quarter.
Last quarter, with very small royalties from SONY PS2 (remember that the SONY PS2 did not launch till late March), Samsung still having a credit balance on pre-paid royalties so only a small number were recognized, and without the SDRAM royalties and one time agreements fees and settlement from Toshiba/Hitachi and OKI (and add NEC now who is the 4th largets producer with about a 10% market share) which amount to about 25% of the global memory supply, and without a large volume of RDRAM PCs (remember last quarter was based on Jan-Mar shipments not Apr-Jun), Rambus showed a profit of $5 million. without ANY of these big ticket items. Do you then really think that with all $$$ of the above and the fact that 75% of all PC workstations shipped were Rambus and 1 million SDRAM 820s were converted to RDRAM, that Rambus could not easily show growth of 180% and 47c for next year? Hell, they'll SMASH that number but I'm not here to tell you about the real big numbers. I'm only here to tell you that with only just 47c or $11 million per quarter, you can buy Rambus today and double your money in 12 months and end up with a huge upside surprise to boot.
All roads lead to Rambus! Buy and hold and you will be rewarded!
Thank You
JK |
