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Technology Stocks : SYNTEL (SYNT) - Upcoming Year 2000 IPO
SYNT 40.990.0%Oct 10 5:00 PM EST
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To: Risky Business who wrote (870)2/23/1998 8:31:00 PM
From: Intrinsic Value  Read Replies (2) of 2761
 
>>Although I would like to hear from you people who think that an >>800 million dollar market cap is justified when SYNT just posted net >>earnings of 3.78 million.

It may not be appropriate to value high growth companies such as SYNT on trailing earnings. On a forward earnings basis, assuming a 12 % revenue run rate quarter-to-quarter and declining SG&A expense as a percentage of revenue, I believe SYNT will make $2.29 a share in 2000 and still maintain a sustainable 3-to-4 years earnings growth rate of around 45%. This means that SYNT will be fairly valued at over $100 a share 2 years from now.

Regards,
Value
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