The earnings of TSS are fairly predictable. Honestly, this is the one
short where I pay almost no attention to the news or quarterly
earnings. Zacks shows that in the previous 2 quarters, the analyst
estimates were within 5% of the actual reported eps. The business is
so predictable, and the p/e is so astronomic, there is little reason to
bother to follow the news.
Below I've pasted the historical revs & earnings from MarketGuide,
and analyst estimates from Zacks. Trailing 12 mo. earnings are $0.36.
The same with the estimated FY 12/97 eps.
re. valuation: With a stock price of 25, the p/e is 69. Using the
analyst estimate for FY 12/98 of $0.44, the forward p/e is 57.
Compare that to the analyst estimate of 21% 5-yr annual growth rate,
and you get a PEG of 3.3, or a forward PEG of 2.7.
The only comparison I can make that does not make this stock
look overvalued is by comparing it to the S&P 500, which has a similar
PEG, with its 7.1% estimated 5-yr growth rate, and a p/e on TTM of
21.5, giving a PEG of 3.0. Just the same, the p/e and PEG of TSS
are a lot higher than those of the parent company and for the primary
competitor
REVENUES (Thousands of U.S. Dollars)
QUARTERS 1994 1995 1996 1997
MAR 40,977 53,380 71,102 83,136
JUN 44,836 59,134 74,489 89,737
SEP 47,938 66,108 80,179 92,135
DEC 53,820 71,086 85,879
TOTAL 187,571 249,708 311,649
EARNINGS PER SHARE
MAR 0.035 0.040 0.050 0.070
JUN 0.040 0.045 0.060 0.080
SEP 0.045 0.055 0.090 0.100
DEC 0.055 0.075 0.110 0.12 (est)
TOTAL 0.175 0.215 0.310 |
