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Pastimes : The Naked Truth - Big Kahuna a Myth
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To: IceShark who wrote (42938)5/25/1999 5:58:00 PM
From: BGR  Read Replies (1) of 86076
 
Ice,

Let's get real here. For that to happen, in the absence of a wide market crash (which is a myth) DELL has to have a significant drop in earnings, just slowing earnings growth won't cut it. For example, DELL's earnings growth slows to 20% it will still probably have a forward PE of 15-20 and EPS in excess of a dollar. Now, given that DELL is still gaining market share very fast, even assuming 0 revenue growth for the industry as a whole it can have a drop in earnings only if there is a huge erosion in margin, which is dicey. Of course, it's market share gains could come to a standstill, or the market may shrink dramatically, but for the former to happen CPQ has to come back to life (unlikely) and for the later to happen there has to be a recession (unlikely again).

-BGR.
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