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Technology Stocks : Westell WSTL
WSTL 5.680+5.0%Nov 20 3:59 PM EST
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To: Trey McAtee who wrote (8587)12/27/1997 8:22:00 AM
From: bill c.  Read Replies (1) of 21342
 
Trey: >> First Call consensus estimates are actually for a loss in '98 of <.57> and a gain in '99 of .06. <<<

First Call still hasn't computed in that 15 million dollar modem that Westell sold/lost to TI. Let's ignore that for now, since First Call has.
If First Call thinks Westell is going to lose $.57 in 1998 and gain $.06 in 1999, lets compute the revenue gain for Westell in Fiscal 1999.

The gap between <$.57> and $.06 = $.63/share. Westell will gain ~$.63/share more in 1999. We have ~36.5 million Westell shares:

36.5 * $.63 = $ 22.99 Million is after TAX revenue GAIN for Westell.. Wait... Westell fall's into the 50% TAX rate so;

$22.99 million * 2 = $46 million before tax gain,

with Westell falllng into a 30% profit margin:

153 * .3 = 46million

$153 Million in NET revenue GAIN for Westell in 1999 above their 1998 NET revenue of ~80Million.

Westell's REVENUE will double from Fiscal year 1998 to 1999. Westell is a growth company in a growth sector, that's why one invests in Westell. I agree that PEG SHOULDN'T be used against Westell... until later.
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