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Technology Stocks : Winstar Comm. (WCII)
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To: Steven Bowen who wrote (790)2/25/1997 1:33:00 PM
From: Steven Bowen   of 12468
 
OK financings in place. Is it safe to look ahead a little bit?

If we assume that analyst Bill Vogel of Dillion Read's predictions are accurate (that Winstar will capture 1% of a $350B market), Winstar will have revenues of $3.5B. If you compare that to AT&T today, AT&T has revenues of $52.5B and a market cap of $64.6B. Just applying the same ratio gives Winstar a market cap of $4.3B. That is a share price of $154. And there are many reasons I think that would be conservative. AT&T is only valued at a PE of 11. Their 5 yr revenue growth rate is -4%. Their 5 yr earnings growth rate is only 5%. Winstar will blow these numbers away.

Comparing them to MCI (rev=$18.5B, market cap=24.3B) you'd get a per share value of around $164. MCI has a PE of 20, rev growth rate of 15%, and an earnings growth rate of 11%.

Obviously this is a very simplistic comparison, but I think it can give one an idea of Winstars potential value. Just have to get revenues up and earnings positive, but they're on their way.
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