I just go by the numbers NTAP EPS GROWTH RATE is 498.14% and PEG ratio is 1 to 6 =0.17 siliconinvestor.com
Even assuming your calculations, which are what is called CAST BACKWARD rather than CAST FORWARD,
95% growth means the stock should double. Thats about $46, but since its so conservative, and cast backward, that is what the price should be right now, not in one year. It conflicts with the above Growth Rate chart on the above siliconinvestor/reaserch webpage. Your calculation is based on Fiscal Year 2000 being .21 and as you say estimates for 2001 of .41, for which estimate the ANALyst in question is wrong and extremely low, but even with that, that is a double. $46 now, and then $92 in a year. etc using your method, with no PEGs computed. The PRICE is always supposed to be discounted expectations of FUTURE EARNINGS. Your estimates are too conservative. Your estimate, and this is why it is wrong, assumes that storage is declining, and not a GROWTH sector which all evidence shows it is growin exponentially. Just look what happens if the TREND continues, and there is NO EVIDENCE, that GROWTH in this GROWING MARKET will slow. That means the next earnings, WAY AFTER THE ECONOMY HAS RECOVERED should be .82 or so under your method, the other number is just a guess which is not an estimate, since it is based on nothing. Also, the Economy is in RECOVERY NOW. That is why your .41 is wrong, its based on an ANALyst who is 12 months too late for what already happened in the market, including in just the last 6 months NTAP rising to $120 then $152 and then down to here at $20-$23. Last Month it was $46. You can't cast back, but need to project forward, and realize that in a recovery, the economy returns to new higher earnings, and the market does so usually 6 months BEFORE the economy. Just wathc what happens when the Fed FOMC lowers rates March 20th and you will see what I mean, that NTAP is OVERSOLD....it will be much higher then, but many will have missed the buy opportunity.
I am,
Truly your$,
-Crystal Ball |
