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Technology Stocks : Azenta
AZTA 29.28-4.2%11:56 AM EST
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To: The Ox who wrote (899)9/13/2007 9:42:29 AM
From: EACarl  Read Replies (1) of 1138
 
Hi OX, let me try this again as our numbers still do not agree:
RE "At a $150MM per quarter revenue run rate, the price to sales ratio for a $7 stock with 70MM shares outstanding would actually be 1.22 and not the 0.25 you are suggesting.

EDIT ( I see my error: actually the P/S would be 0.81 NOT 1.22 but the point is still the same )"

I'm taking net cash per share OUT of the stock price because we know $4 per share in cash is worth $4 per share to the stock price AND is not generating sales. So GS $7 target means they value BRKS (the operations of the company - which include the sales) at $3 per share. Now if we use your $150 million "Q" run rate that's $600 million per year divided by the shares after the buyback of ~64 million, that's $9.375 in sales per share. Then take the $3 ($7 GS target less $4 net cash) divided by $9.375 (your forward annualized sales) = .32 Price to sales. Again my point is that there comes a point where a stock gets valued by means other than P/E, and the above is why I think GS target using P/E is one of them.

NOTE: the difference in my previous post and this post in (let's call is P/S adjusted for net cash) is because I was using TTM sales last time vs. Your estimated forward sales rate this time.
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