Tom - Thanks to you and Mel for sifting through the conference call and
posting key comments.
I've cranked some numbers based on the two pieces of information in
your post - sales rev growths of nearly 20% and gross margins of 37.5%.
Now assuming that R&D, etc., run in-line with these, this implies '98
figures of -
Sales Revenues - 112m
Contract costs - 70m
Earnings - 9.5m
According to what share quantities you use to calculate EPS, this is
about $1.10 EPS. (Share numbers have been increasing, but there's
also a buy-back program).
Now, also assuming that nobody in the company is going to give predictions
which are "optimistic", I'd say this gives a minimum target for the
year, which, judging by the Q1 numbers, they seem to be on-target for.
If they hit $1.10, they'll be 25c above the current analyst target (85c).
If they hit $1.10, they'll be 19c above the '97 numbers (i.e. 21% gain).
My feeling is that they could exceed $1.10, and will show revenue,
earnings and EPS growth of more than 20%. That would deserve a PE of 20+
and put a target price in November of >$22+.
I think we'll have to wait for comments relating to their contract
negotiations before we know how much up-side might exist. At this
stage my earlier prediction of $1.50 might be looking optimistic. We'll
have to see.....
Mark |
