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Technology Stocks : Jabil Circuit (JBL)
JBL 228.15+1.2%Dec 9 3:59 PM EST
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To: Finder who wrote (3904)5/21/1998 3:05:00 PM
From: Asymmetric  Read Replies (3) of 6317
 
Always Nice to Have Rich Company,

Jabil continuing to sell at totally ridiculous valuation.
In referencing Alex Brown report:

exchange2000.com

At discouraging times like this it helps to review some
of the fundamentals that underpin this stock.

Alex Brown conservatively projects $2.70/sh 1999
So stock selling at at 35 7/8 carries a forward PE of 13.3.
(35 7/8 / 2.70 = 13.3)

Jabil has stated that revenues/earnings will likely be flat
over next two quarters.

Earnings already in for 1998 are - 1st Q = .49
- 2nd Q = .52
So .52 X 3 = 1.56 (flat earnings over 3 quarters)
add in 1st quarter of .49 and 1998 earnings are $2.05
$2.05 is a 32.7% increase over 1997 of 1.38.
$2.70 is a 31.7% increase over 1998.

Looking at revenues - 1st Q = 319.512 mil.
2nd Q = 330.688 mil.

so if next two quarters are flat, 330.688 X 3 = 999.064 mil.
Add back in 1st Q of 319.512 and likely total revenues for
1998 are $1311.58 million.

With H-P laser printer deal likely to add $500 million in
revenue next year, total revenues for 1999 will be
1311.58 + 500 = 1811.58, or revenue growth of 38%.
(500/1311.58)

This does not include ANY growth in Jabil's present customers
or any additional new business. Now if Jabil's present business
grew at only 1/2 of ECM industry growth rate of 25%, (Jabil is
actually growing FASTER than the industry sector it's in),
then using 1998 revenues of 1311.58 X 12.5% = 163.95 mil
additional revenues for 1999. If this is added in to previous
figure of 1811.58 then 1811.58 + 163.95 = 1975.53 million.
This figure produces revenue growth of 1999 over 1998 of
1975.53 - 1311.58 = 663.95
663.95 / 1311.58 = 50.6% revenue growth.

So on a forward basis, at 35 7/8
Jabil sells at a present 1998 PE of 17.5
Jabil sells at a forward 1999 PE of 13.3

where 1998 earnings grow at 32.7% over 1997
where 1999 earnings will grow at 31.7% over 1998

where 1998 revenues grow at 34.1% over 1997
where 1999 revenues grow at 50.6% over 1998

(calculated where 1999 revenue grows at 12.5% over
present business and adding in $500 million for H-P deal)

And finally on a Price/Sales Ratio:
at 35 7/8, Jabil has a market cap of $1370.64 million.

So if 1998 revenues are 1311.57, P/S ratio is 1.04.
and if 1999 revenues are 1975.53 P/S ratio is 0.69

Hope this helps. Good luck to us longs. Peter.
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