Well, after some rough number crunching...
Looking at the past two quarters:
Q2-98 Q3-98 Q-Q %change
revenues 158.8 174.2 9.6
net income 40.1 44.8 11.7
basic earnings 0.67 0.75 11.9
f/dil earnings 0.63 0.70 11.0
Apparently, Q3 (the latest) is seasonally strong, so, for the
next few quarters, if one assumes further growth, but offset by
a seasonally weaker period (??? maybe not), then use a rate
of $0.70/sh/qtr earnings for the next few quarters
--> thus: 4 X 70 = $2.80/yr est. earnings
Thus, over the next half year to a year, some reasonable
price targets would be:
@ P/E of 25X --> $70/sh target
@ P/E of 30X --> $84/sh target
@ P/E of 35X --> $98/sh target
IMO, 30X would be quite reasonable (if not low) for a growth company
like this, and thus a target of $84/sh is arrived at. If they make
an acquisition, and its perceived to be a good one, then the multiple
could go up, as people will assume Geac can pull off another
D&B-type turnaround. |
