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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)

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To: Skeptic who wrote (7090)12/11/1997 7:25:00 AM
From: Rob L.  Read Replies (1) of 31646
 
Skeptic, if TPRO is earning $2.50 a share in 1999 and 2000, I can guarantee you the stock will be trading at significantly higher levels. I am not sure I understand your analysis. You are saying that if the company earns "$1.02 in FY1998, $2.50 in FY1999 and FY2000, $1.00 in FY2001, and $0.50 in FY2002 (no millenium bug here)", the stock will only be at around 9. That is only a PE ratio of around 4-5 for 1999. Rapidly growing companies, if TPRO turns out to be one of those, command very high PE's. If you assume that the the stock could connservatively trade at 30x its per share earnings, then according to Red Chip's $1.02 estimate for 1998, then the stock should be trading at around 30. Am I missing something here?
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