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Technology Stocks : CheckFree Holdings Corp. (CKFR), the next Dell, Intel? -- Ignore unavailable to you. Want to Upgrade?

To: Benny Baga who wrote (13103)	1/12/2000 8:21:00 AM
From: CAPT TONY	Respond to of 20297

>>I think there is other stuff there also Benny, I didn't realize CKFR sold off all the other divisions (other than EBPP), or why they should be eliminated from his model. I guess they don't contribute anything in the ZANDI world. <GGG> Capt T.

To: Benny Baga who wrote (13103)	1/12/2000 4:44:00 PM
From: noiserider	Read Replies (1) \| Respond to of 20297

<<A '20' multiple? FDC has a 32 multiple and even Warren Buffett considers them undervalued >> I think you've identified the big variable. As you mention, FDC has a multiple of 32 when their growth rate is fairly low at 7% per year. It's a guess what CKFR's growth will be in 2004, but it's probably closer to 25% than 7%. In fact,the SSB model uses a revenue CAGR of 25% per year from 1999 to 2004. A better company for comparison might be PAYX. PAYX has the same steady revenue stream from payroll processing that is relatively immune to economic conditions. Operating margin=17%; Growth=25%/yr; P/E(ttm)=64. That gives CKFR a 12 month price target of $128 even without the revenues SSB forgot to include.