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Technology Stocks : EMC How high can it go?
EMC 29.050.0%Sep 15 5:00 PM EST
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To: Just4fun2 who started this subject1/22/2002 9:45:16 PM
From: Gus  Read Replies (1) of 17183
 
EMLX (HBAs) just reported 18% sequential growth after a truncated quarter that showed -10% sequential decline from the previous quarter. STK (robotic tape Libraries, some disk arrays) reported 14% sequential growth. IBM reported 60% sequential growth in Storage Management Software.

The earnings reports from these high-end storage vendors suggest a reasonable chance that EMC will post stronger than expected revenue growth -- with Software and Services growing more strongly than Hardware -- and post lower than expected losses. The current High Estimate for Revenue assumes 17% sequential growth from $1.2B to $1.4B,
but Software and Services are not facing the same pricing pressures as Hardware so any revenue upside will probably come from those two segments. This would also validate the anecdotal reports that AutoIS (introduced in October) is gaining traction and that EMC is adopting the same low-key strategy that they used to take ESN Manager to 8,000+ licenses in less than 8 months. Measure several times, cut once and cut swiftly. The EMC way.

If I am correct, the relative visibility of the European part of EMC's second RIF (1/3 of 4,000 employees) and its impact on SG&A means that, almost assuredly, the 1Q02 numbers will go up since the 4Q01 and 1Q02 numbers are practically the same. With most people modeling a gradual economic recovery (2H02 or 1H03), that leaves considerable room for these estimates to start trending up in future quarters as more data presents itself. That improving trend should allow EMC to start climbing its wall of worry, particularly the questions about hardware margins.

From Yahoo:

EMC
Earnings Estimates

                        4Q01     1Q02

Average Estimate       (.07)    (.06)
LOW ESTIMATE           (.10)    (.08)
HIGH ESTIMATE          (.04)    (.03)
Number of Analysts       29       28

Revenue Estimates

Average Estimate       $1.3B    $1.3B
LOW ESTIMATE            1.2B     1.2B        
HIGH ESTIMATE           1.4B     1.4B
Number of Analysts       28        8

Current Broker Recommendations

STRONG BUY               4
BUY                      8
HOLD                    17
SELL                     0
STRONG SELL              1

MEAN                   2.5

Current Price Targets

HIGH TARGET         $21.00
MEAN TARGET          18.67
MEDIAN TARGET        20.00
LOW TARGET           13.00

No. of Brokers           6
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