SI
SI
discoversearch

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 : Wind River going up, up, up!
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Mark Brophy who wrote (4861)4/13/1999 6:23:00 PM
From: Erwin Sanders  Read Replies (1) of 10309
 
<What is the fair price if you reduce your estimate of earnings growth from 40% to 26% for the next 5 years? Your sensitivity tests take into account a lower long term growth rate and higher interest rates, but ignore a lower short term growth rate.>

Reducing the 5-yr growth rate to 26% from 40% p.y., the "fair price" as measured by the discounted value of 15 year's earnings, comes to $37 growing to $95 in five year's time. If, in addition, the long-term growth rate after five years drops to 10% from 20%, the "fair price" is $26 growing to $41.

Another way to look at it: what earnings growth assumptions would justify today's closing price (approx 13.75)? 17% growth for 5 years followed by 0% growth therafter would do it.

Clearly, Ron Abelman is justified when he says that Wind's price is way undervalued.

A correction needs to be made to my comment on the consensus estimate for the current year. It is clear from the conference call that I20 is now included in Wind's forecast revenues. This is certainly the first time I am noticing it. Tornado 2 is obviously also part of the forecast (the delay of which was the cause of the Q1 shortfall, according to Wind). What was not clear to me is whether any estimates were included for Tornado for MS, over which they seemed so excited about.

Erwin
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News