PSIX up 26.5%, Takeover(?) 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 : PSIX up 26.5%, Takeover(?)

PSIX 71.20

+6.6%

Jan 12 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Stephen Adnan who wrote (720)	2/12/1997 2:53:00 AM
From: John Grandy	of 5650

I have to say that the methodology which Pru used to compute their price target is ludicrous: << After reaching profitability in late 1997, we believe PSI could earn $1.00 to $1.30 per share in 1998 on 65% revenue growth. As computer service firms typically trade at 3/4's the next years 's growth rate(49) we belive PSIX could move to $49 to $65 by late 1997. >> Their saying that price of a security in a given sector can be estimated as completely dependent upon forward growth rate. This formula does not take into account the number of shares outstanding. It improperly tries to find some relationship beetween stock price and revenue growth, not between market cap and revenue growth, as is proper. Let's do an example: 2 companies in the same sector with the same revenues and the same revenue growth rate (say 50% per year), Company A with 100kk shares outstanding, and Company B with 200kk shares outstanding, according to Pru both should eventually trade for $50. But this would give B a market cap twice as high as A for no reason! I think Pru is a bunch of bullshit artists.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next