valuation yardsticks:
From 1995 to today, the PE of JDSU (using TTM pro forma EPS) has varied from 14 to 557. The P/S range has been from 1.1 to 60. Those ranges are so wide, they are useless for trying to predict the future.
IMO, the last "non-bubble" year for JDSU's valuation, was 1995. In that year, the PE range was 21-48, and the P/S was 1.1-3.6. By 1996, the PE range was 29-82, and the P/S range was 2.7-11. With the PE approaching triple digit, and the P/S into double digits, valuations were already disconnected from reality, in 1996. After that, the valuations kept on rocketing up, "to infinity and beyond!" (until they suddenly didn't).
So, I think we can use the 1995 valuation ranges as a useful yardstick, for JDSU's "home range". And I think we have to discard everything since then.
Unfortunately, this still doesn't help very much. In these current industry conditions, where there isn't any E, using PE is not a useful metric. Once we've finished with the Bubble, and finished with the Aftermath of the Bubble, then PE will be useful again. Maybe in 2003, at the earliest.
That leaves P/S. Trailing 12M sales are 3.2B$. But......by late 2002, what will TTM sales be? This is a question you have been asking, over and over, and no one has been answering. No, I can't answer it either. Not even approximately, other than to state the obvious: it won't be anywhere near 3.2B$.
Interestingly, the 1995 P/CF range was 12-36, and the current value is 6. So, using the 1995 yardstick, the current value is Value.
For a good laugh, look at the P/B. With the denominator of that ratio approaching zero (as goodwill is taken off the books at an impressive rate), we should see a rebound in the P/B, from the recent multi-year trough of 0.2, taking out the 1998 peak of 13. Which will signify precisely......nothing. |
