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Technology Stocks : EXABYTE

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To: Kushi Kullar who wrote (83)8/13/1997 8:06:00 PM
From: van wang   of 218
 
sry, wanted to run a valuation model

for the following:

long rate 6.5%
risk premium 5.5%
perpetuity growth rate (nominal): 5.5%
97 eps: 0.39
98 eps: 0.89

free cash flow to equity model

fair value: $14 5/8
target price for early to mid 1998: $17

i agree with bronco on the upside potential...this Q, EXBT must hit 0.12 in my estimates...they have the means with Mammoth and the Eagle...if they do its $14... if they dont $10-$11...right now dont worry its people fantasizing about disaster correction scenario...its an aggressive buy at $10-$11 level

but i dont think EXBT is a long term buy...it just hasnt done enough to protect themselves agast competitors (larger ones) or diversify into higher growth storage segments...i am not enamored with their business/operating model

cheers
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