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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: fedhead who wrote (34832)	12/6/1999 9:37:00 PM
From: Casaubon	Read Replies (1) \| Respond to of 99985

The jist of the argument, as I understood it, was that Yahoo is already very far behind where MSFT was at this point in its evolution as judged by revenue and earnings. As of today, Yahoo, at it's closing price of 280, has a market cap of $74 billion - with annual revenue running at $465 million and annual after tax (and after non-recurring expense) net income at $34.5 million (per Edgar SEC filings). Microsoft had a market cap of $74 billion some time in mid 1996 - Microsoft's stock price was the equivalent of approximately $14 per share at that time. Yet for the fiscal year that ended June 30, 1996, Microsoft reported $4.6 billion in revenue and $2.1 billion in after tax net income. That's 10 times Yahoo's current revenue, and 60 times Yahoo's current net income. One could conclude that YHOO is 60X overvalued relative to where MSFT was at in 1996. And this assumes that MSFT is "fairly" valued.