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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (12663)	12/13/1999 5:15:00 PM
From: Apollo	Read Replies (2) \| Respond to of 54805

Mike: Thank you very much for taking the time to review the Exodus overview. Your insight on "the numbers" and on its godzilla potential was invaluable. In that overview, based on the website, several analysts' reports (First Union Securities, Legg Mason, Dain Rauscher, Sun Trust and Hambricht & Quist), some news items and several message boards, the report was heavy on fundamentals and a description of the market segment, and fairly lean on things like valuation metrics, numbers, etc. The reason for that is that numbers & valuations for stocks is a major weakness for me. Just am not fascile with them at the present time. You point out differences in projected annual revenues for FY99, and such, and the explanation for this could be: 1. At the time the report was compiled, Exodus was substantially lower in share price; a number of analysts first upgraded it to $150/share; then Merrill Lynch came out last week and upgraded to $200/share. The stock splits tomorrow after market close; and is now $167 11/16. It has had quite a run the past 2 weeks: siliconinvestor.com 2. I think you rightly expose differences in what analysts estimate, what is published in the press and what your careful review of the numbers might unmask. This speaks to each of us being more fascile with "the numbers", and in making our own determinations. I have no good excuse for not performing my own numerical DD apart from not knowing how; I am sure the day will come when I am better at this. 3. Differences in P/S ratios could be based on what the current P/S is, vs. what it is expected to be in the future. The reports point to a 40% quarterly run rate in revenue growth. By my crude estimates, the 4th qtr '99 revenues should approximate ~ $93 million, with '99 annual revenues of $235 million. Should the run rate continue (I know, big if?), Y2k annual revenues would = 1.4 x 1.4 x 1.4 x 1.4 x $93 million = $357 million for FY '00. Yet as I type this, I am looking at David Levy's H & Q report from 12/1/99, and he lists 2000 Est. revenues of $638 million. "Exodus has posted 40+% revenue growth in each of the last 12 qtrs. We expect the company to continue to post robust top-line growth, with positive cash flow EBITDA coming in the first qtr 2000." On the Dec. 1st report, the stock price of EXDS was $107, the market cap $12.5 billion, and the forward PSR ~ 22 (= market cap/'00 revenues est. $638 million). Doing this Exodus overview was a great exercise for me, and provided more questions from my threadmates here for me to answer. I am learning slowly; thanx for your patience. stan