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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: LBstocks who wrote (3485)	11/22/1999 6:02:00 PM
From: Wyätt Gwyön	Respond to of 13582

Pro forma the sale of its handset division, we believe Qualcomm will generate $2.5 billion in revenues and $1.2 billion in pretax profits in fiscal 2000. Based on our view, QUALCOMM deserves a valuation of at least 30 times forward revenues. Market cap of 75 billion. I guess that means 386 a share or 468 a share, depending on whether we're talking 160 or 194 million shares. Given the market we're in, I'd say 160 million, so 468. Not bad for a bottom-end valuation!

To: LBstocks who wrote (3485)	11/23/1999 11:22:00 AM
From: idler	Read Replies (3) \| Respond to of 13582

I cannot reconcile the unbounded optimism of the Alex Cena report with the dour pessimism of the H&Q report. Although H&Q may well have reasons to be bearish, I believe they were correct in their July report that ASP's of handsets were going down and therefore that division would be much less profitable -- which, of course, led to Q's decision to sell that division. So I don't think you can totally disregard what H&Q says. My take is that H&Q is hopefully extremely myopic in not properly factoring in worldwide growth of the CDMA markets or any revenues from HDR (which are still yet to be realized). On the other hand, while I hope Cena's long term outlook is correct (and it certainly appears to be as of now), I would love to see some hard numeric analysis of how that growth would translate into higher numbers than H&Q projects, even if H&Q is correct about declining ASPs because of increased competition. I note that H&Q's estimate for fiscal year 2000 net earnings is over $1 less than Cena's estimate.