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Non-Tech : Iomega - A Civil Discussion
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To: Doug (Htfd,CT) who wrote (1843)7/19/1997 1:51:00 PM
From: FuzzFace   of 1908
 
I like this part of the Motley Fool analysis from
fool.com
(bold emphasis mine):

Estimates stand at $0.20 per share next quarter and $0.85 for the fiscal year ended in December. The stock trades at 27 times that estimate. For 1998, four analysts expect $1.14 per share. Iomega trades at 20 times that estimate, while expected to grow earnings 81% this year and 34% next.

The current PEG ratio on the stock comes to 0.71. This is based on a $23 share price with a trailing P/E of 38, on $0.60 in trailing earnings, with $1.14 EPS estimated for the year ended in six quarters. There are no long-term growth rates available on which to figure the YPEG. A stock at $32.50 would result in a trailing P/E of 54 and would put the PEG at exactly 1.0 -- the implied current fair value based on only this measure.

For a company that has faced cash crunches in the past, mainly while ramping up production, the strong positive cash flow is a welcome success. While other valuations show a current ratio slightly above 2.0 (meaning that the company has twice as much in current assets and cash as it does in current liabilities), and a quick ratio of 1.50 (the same measure, but inventories are subtracted from current assets). Both numbers are favorable. A quick ratio of over 1.0 is usually adequate to pay the bills.


So Rocky was right, IOM's PE is going down. But as a few on the IOM threads noted, not for the reason he hoped for.
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