AUTOHOME, Inc Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : AUTOHOME, Inc

ATHM 24.34

-3.4%

Nov 7 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Roger Bass who wrote (1387)	2/19/1998 12:40:00 PM
From: ahhaha	Read Replies (2) of 29970

If you apply this questionable calculation to most companies, you won't find any that trade at their discounted future values. Discounting is an academic exercise in pseudo-intellectual babble. At the university we have to rationalize mechanically in order to appeal to rigor. You can't succeed at investment with this approach. Quite correct, we can argue about 10% discount rate. Why is that accurate? What does the present market price have to do with whether the company is a good future investment? Your calculation purports to establish overvaluation or undervaluation. Does it do that? Your calculation fails to introduce synergies into the discounting rate. Those synergies are not recognized by you, so they are not factored into the rate. If there are 70 million potential customers and ATHM gets them all, does that mean that that is all the domestic customers there will be? Who says the yield per customer will be what you claim in the future? There is the substantial potential that there are unrecognized benefits from cable which displace other unrelated customer costs like the enhanced potential of telecommuting. How does this bump up ATHM revenues? Same way AOL and MSFT get their power, through increased visibility and all the synergies that implies. Are there more than 70 million potential customers in the world? How about 700 million. If MacDonalds can do it, so can @Home. @Home has the unique distributional architecture which foreign cable companies will emulate. But they will do the emulation under the @Home brand because the infrastructure would be hard to install from scratch. Cheaper and safer just to join up. A better calculation is to estimate a 10 year growth rate, say 50%. So the company could sport a 50x. Using a 5 year target of 10 M customers, take the $1000/yr/cust x 10 million cust = $ 10 billion. Divide by 200 million shares = $ 5/shr. $5/shr x 50PE = $250/shr. Now if they get 100 million world customers... There's nothing like calculation.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next