I am curious about this "buy" rating. If BBRS thinks TXCC will earn $1.10 in FY00 which is 36% eps growth above their FY99 estimate of $0.81, why is this stock a buy? Seems like at best it's fair value of 36x1.10 = $40 rounded up. That's trading on next year's earnings. The estimate of $1.10 for FY00 is still lower then the current consensus from First call of $1.13 (or 40% eps growth over FY99). The consensus points to a 40 x 1.13 or a $45 target.
I think these "estimates" for FY00 will continue to be raised each quarter after each earnings release. From my calculations for FY00 earnings, I think they will probably be closer to $1.22 or 50% eps growth and a $60 6-12 month price target is very fair.
BancBoston Robertson Stephens Reiterates Buy Rating, Raises Estimates on TXCC
SAN FRANCISCO, April 15 /PRNewswire/ -- The following is being issued by BancBoston Robertson Stephens, a member of the National Association of Securities Dealers, CRD number 41271:
BancBoston Robertson Stephens managing director and senior communications and networking analyst Paul Johnson today reiterated his Buy rating and raised estimates on TranSwitch Corp. (Nasdaq: TXCC). TranSwitch, headquartered in Shelton, Conn., is a fabless semiconductor company that supplies advanced integrated circuits (ICs) used in broadband telecommunications applications.
"We are reiterating our Buy rating on TranSwitch and raising our estimates for fiscal 1999 to reflect the higher profitability reported in the first quarter and greater confidence in the company's business model. We believe the company continues to do an excellent job of managing its financial performance," said Johnson. "Given TranSwitch's above-expected firs-quarter results, we are raising our fiscal 1999 earnings per share estimate from $0.75 to $0.81. In addition, we are initiating a fiscal 2000 earnings per share estimate of $1.10."
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SOURCE BancBoston Robertson Stephens
CO: BancBoston Robertson Stephens; TranSwitch Corp.
ST: California, Connecticut
IN: FIN CPR TLS
SU: RTG
04/15/99 15:03 EDT prnewswire.com |
