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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 177.78-2.2%Jan 9 9:30 AM EST
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To: SKIP PAUL who wrote (79250)7/27/2008 7:36:58 PM
From: A.J. Mullen  Read Replies (1) of 197157
 
Skip,

I don't understand your concept or your numbers. "Qcom is currently priced for 19% growth over the next five years." Is this based on expected P/E in five years, PEG ratio, or what?

Comparing earnings between 2013 and 2008 gives 8.3/3.5=2.37, but comparing handsets gives 1.3/0.438=2.96. The former is close enough to 1.19**5 to be a rounding error, but not the latter.

As practical matters, I expect revenue to rise faster than handsets; and earnings to rise disproportionately to revenue. ASPs will tend to rise with increased sophistication of handsets; and earnings should rise faster than revenue because costs associated with royalties need not rise in proportion to those royalties.

Ashley
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