Rambus (RMBS) - Eagle or Penguin Message Board

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Technology Stocks : Rambus (RMBS) - Eagle or Penguin

RMBS 84.85

-2.7%

10:10 AM EST

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To: Gary Wisdom who wrote (17315)	3/12/1999 8:15:00 PM
From: puborectalis	Read Replies (2) of 93625

Analysts don't regard current earnings as relevant by: fneww 9262 of 9268 Cowen's Drew Peck and MSDW Mark Edelstone have both ussued buy recommendations on Rambus because of future earnings prospects. They have commented that the high PE based on this years earnings can be disregarded because once the earnings ramp begins after RDRAM rollout, the PE will drop. They have target prices of 110 based upon earnings of $1.10 in fy2000 which begins this Oct. So they see a PE of 100, justified by earnings going from .32 in fy1999 to $6 to $8 in fy2002.Notice that a price of 110 would be a PE of about 15 based upon fy2002 earnings.Current pricing in low 70's would appear to be a bargain if these projections are realized. Since we're looking at huge earnings growth which won't begin for about six months and a trajectory which looks to be almost verticle, you've got all the ingrediants for extreme volatility. Any news that firms up a Sept. rollout should cause a gap up in price , while any further slippage news will most likely hurt the stock. Intel said at the Feb. IDF that they expected to resolve remaining tech issues within the next three months in order for OEM's to have three months to get their boxes ready for a Sept rollout. So before the end of May, we should get a progress report from Intel or Rambus. Look for Aprils earnings report from Rambus to provide clues for direction of the stock price.Remember that prior to the Jan earnings report, the stock had a big runup due to rumors of a stock split, a positive earnings surprise and no indication of any schedule slippage which began to surface in late Jan. As we advance to this earnings report, the stock has corrected, the expectations are muted with respect to near term earnings, so that any "positive" forward looking guidance from management could give the stock a big lift. Posted: Mar 10 1999 6:59AM EST as a reply to: Msg 9252 by liem887799

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