You think CPQ is going to earn $1.50 this year? I don't think anyone knows right now. I think the estimate was around $1.70, correct me if I am wrong. Well, you can subtract at least .35 from that. That gets you down to 1.35. They expressed doubt about the second quarter too, so lets take another .20 off. That gets you to 1.15, and assumes a miraculous turn around for the remainder of the year. So its a PE of 13.
Anyway, how good do you really think these estimates are at this point. Obviously, the current quarter was wrong by 100%. That's one of the big problems with this market. Looking at forward PEs. They are quoted these days as if they were the actual. I would suggest using actual PE as a much more meaningful gauge or at least taking the current quarters earnings and annualizing it. Do that with CPQ, and see what you get.
I think last years price when sales were equal to this quarters, and earnings were much higher and growing, is more than fair.
WS |
