Rob, Rainier & All: Thinking about the recent valuation posts &
disagreement, I went back and reviewed Baseline carefully. In a
sence, EQNX is close to it's historic valuations in some key areas,
but as EQNX is being perceived as more of a growth play with good value characteristics than a value play with growth potential now, some may not matter as much.
Using Baselines 3/11 report
Ratio Current Historic Range
Price/Book 2.8 .7-3.0
Price/Sales 2.35 .7-2.5
PE 18.9 11-34
Price/Cash flow 16.2 6.7-37.2
Margins are at an all time high (which I beleive allows some upward room in PRice/sales), ROA & ROE are at their best since 92.
When I look at all the numbers, I see some more upward room, between Rainier and Rob a year out. But my caution is EQNX being able to sustain high EPS growth after the next 2 qtrs. The year/year comparisons will probably be good going against .19 & .23. The concern is when we hit .30 & .35 for qtr3&4. Hopefully, the effects of the IBM partnership should have made a material contribution to the bottom line by then, else EQNX may encounter a serious high expectation disappointment problem. Given the likelihood of a down or flat market due to a stream of earnings disapointments and downward earnings revisions taking it's toll, At this point, I'd be happy to see EQNX at 26-28 a year from now. My thoughts, Scott
FYI, Rob, you're fairly new here & are probably not very familiar with Rainier, but if you read his posts on this and the PERLF, QSNDF and especially the Rational Analyst threads, I believe you'll find he's a very studious, well rounded analyst who does his homework well.
No flames intended in any direction. |
