Pixar has been a real boring stock for the last year, and to be honest, I don't mind that one bit. I think it was 18 months ago that I posted here my financial outlook for Pixar, and I don't think it has changed significantly.
My projections were that each of the Pixar films would gross $150M domestic box office, and here we are in 1999, and that is pretty much what ABL got (ok, 162M)
Steve Jobs said at H&Q yesterday that a $150M domestic box would lead to $700M total revenue, and about $300M Profit. That's higher than I figured, but not out of line.
The fact is, Pixar is *still* living off nothing. 15% of Toy Story I, and some miscellaneous revenue. And they are *still* breaking even.
As soon as some of that hot 50% take starts rolling in, the stock will respond.
Pixar may earn a $1 this year, and even more next year as cash from TSII comes in in the second half of 2000. In 2001, hype for the new movie will be growing, so I expect a strong valuation.
I think earnings in 2001 could easily top $2/share, which makes a price of 60 in two years pretty easy. Things get interesting when you realize that earnings in 2002 could be closer to $3/share.
We'll see - I am worried that TSII might only book closer to $100M, as it is just a sequel (tm).
- Adam |
