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Technology Stocks : THQ,Inc. (THQI)
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To: Todd D. Wiener who wrote (7188)7/23/1998 7:42:00 PM
From: Sigmund  Read Replies (1) of 14266
 
<<< This is somewhat ironic, but the market may be more willing to pay up for what appears to be a stable grower (30%)-like ERTS-, rather than a stock that will see declining rates of growth (THQ). <<<<

I guess that is the crux of the matter. Now that most of the WCW uncertainty has been removed, what ongoing PE will be applied to THQI? It may take a few quarters before we approach this multiple asymptotically and therefore know what it is. I assume that it will be a higher multiple than is the case today. Thus earnings growth and PE growth should be a favorable environment for the longs.

But the shorts will from time to time get some mileage out of the declining growth rate scenario.
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