Chuzz- If Mr. Miller is typical (of those waiting on the sidelines "should I buy Dell, should I not...because it is trending around fair valuation")...I would submit the following...
* Almost all analysts are valuing Dell assuming a 5-year annual growth rate of around 30% (high side 35%)...as you have frequently metioned, all the factors are in place so that Dell can grow (EPS, at least) at 50% over the next 5 years...if this 50% proves to be correct, then most cash-flow-based valuation models (like Mr. Miller's) are, in all probability, valuing Dell way TOO LOW...
BTW- I'm becoming more and more firm in my belief that Dell is going to have a blow-out 1999...and that EPS (y-o-y) can grow at rates above 60% (and even, some quarters 70%, y-o-y)...This would blow away all current estimates for the performance of the company during this period....
* Dell is poised to have its greatest upside surprise in several quarters, announced on Tuesday....At .34 per share (which may indeed be too low), Dell would beat all whispers, and be .03 above consensus...If .34 or better is acheived, this will force analysts to significantly upgrade 1999 earnings estimates for Dell..giving heft to the stock... |
