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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: MileHigh who wrote (49747)	11/13/1999 3:18:00 PM
From: howardhu	Respond to of 152472

I am a QCOM owner, and have been checking this thread for sometimes now. I just had a simple exercise, and would like to share it with you. Comments are welcome. Qualcomm Valuation - based on the current business model without counting the valuation of HDR, adoption of CDMA in China, India, ... (very conservative)! ASIC section: 99: Rev $1,133m, Earning $428m (margin 38%) 00: Rev $1,700m, Earning $680m (margin 40%), after tax $442m = $2.28/share Note: (1) 1999 ASIC units are about 40m, and the projected number for 2000 is 70m units, representing a 75% growth. Taking into account of the reduction in the unit price, let's use the growth rate at 50%. (2) diluted number of shares used is 194m. (3) tax rate 35%. Royalty & License section: 99: Rev $454m, Earning $405m (margin 89%) Q1: $44m, Q2: $77m (75%QtoQ), Q3: $92.7m (20%), Q4: $113m(22%) 00: Rev $908m, Earning $817m (margin 90%), after tax $531m = $2.74/share Note: 2000 projection is based on a 20% Q to Q growth rate (low end) for the last three quarters. Other: 99: Rev: $940m, earning $20m (margin 2.2%) 00: Rev: $1,200m, earning %37m (margin 2.2%), after tax $24m = $0.12/share Note: based on a 30% growth rate. 2000 total earning per share = $5.14 2000 Valuation: For the ASIC section, the normal PE for the industry is 40-60, taking PE=50, the fair value for this section is $114. For the Royalty & License section, the PE for the similar business is 50-120, using PE=100, the fair value for this section is $274. For the Other section, using PE=30 (corresponding to its growth rate), the fair value is $3.6. Adding them together, the current fair value of QCOM is at $391.6.