Rambus (RMBS) - Eagle or Penguin 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 : Rambus (RMBS) - Eagle or Penguin

RMBS 89.73

+2.3%

2:46 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Michel Bera who wrote (3263)	3/11/1998 9:30:00 AM
From: REH	Read Replies (3) of 93625

Here's how I see the potential for Rambus - this is without the added market that DTV will give: In 1999 the semiconductor market will be about 80 billion, 10% market-share for Rambus would give Rambus a royalty of 120 million (based on 1.5% royalty). If we deduct 20% for G&A and R&D and 40% tax this should give Rambus an EPS of $ 2.16. Under this scenario stock price would be (relative to P/E): P/E 30: $ 65.00 P/E 40: $ 86.00 P/E 50: $ 108.00 Historical P/E's: Low: 333 High: 940 At a P/E of 130 (less than half the low to date) the stock price would be $ 281.00!!!! Let's say Rambus gets a 30% market-share in 2001 (and the semiconductor market in 2001 will be about 125 billion), then the numbers would look very impressive: EPS (same variables as first example): $ 10.80 P/E 30: $ 324.00 P/E 40: $ 432.00 P/E 50: $ 540.00 At a P/E of 130 the stock price would be 1,404.00!!!! This is not unrealistic, as a matter of fact the potential market share in this example is less than what the industry predicts. The P/E will most probably be closer to 130 than 30 based upon the potential future growth in royalty income. Now 10 times in 3 years seems very realistic!

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next