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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: YlangYlangBreeze who wrote (8986)	4/16/2000 2:50:00 PM
From: Brian K Crawford	Respond to of 24042

YY...a little more on JDSU valuation, and then we'll rest. Recent Chase H&Q estimates for JDSU, normalized (normalized = acquisition costs backed out, but after income taxes that would be payable on the normalized earnings) Period 1999A 2000E 2001E ------ ----- ----- ----- Q1 EPS $0.03 $0.07 $0.12 Q2 EPS 0.04 0.09 0.13 Q3 EPS 0.05 0.10 0.15 Q4 EPS 0.06 0.11 0.16 FY EPS 0.18 0.37 0.56 YR/YR GROWTH 106% 51% FY REVS (millions) $588 $1,295 $2,248 YR/YR GROWTH 120% 74% CY EPS 0.27 0.47 0.66 YR/YR GROWTH 74% 40% Stock Price 4/14/00 $79 5/8 CY P/E 295 169 121 =========================================================== Lets compare the Chase H&Q numbers for Cisco: (These were February estimates, before the stock split 2/1) Period 2000E 2001E ------ ----- ----- Q1 EPS $0.24A $0.29 Q2 EPS 0.25A 0.32 Q3 EPS 0.26 0.33 Q4 EPS 0.28 0.35 FY EPS 1.02 1.30 YR/YR GROWTH 27% FY REVS(Millions) $17,885 $23,607 YR/YR GROWTH 32% CY EPS 1.15 1.45 YR/YR GROWTH 26% Stock Price 4/14/00 $57. (since all the above estimates are before the latest 2/1 split, we'll need to adjust the stock price to the pre-split equivalent of $114) CY P/E on pre-split price of $114 99 79 =========================================================== So, we pay $79.00 for a dollar of Cisco earnings in 2001. We pay $121.00 for a dollar of JDSU earnings in 2001. Ratio: 121/79 = 1.53 Cisco is growing at somewhere around 27% in 2001. JDSU in 2001 is estimated to be growing about 40% Ratio: 40%/27% = 1.48 Tentative conclusion: Investors aren't crazy. After adjusting for acquisition static in the EPS, they award a comparably higher price to earnings to JDSU than Cisco, and the ratio is roughly equal to the higher expected growth rate. My editorial comment and personal opinion: The Chase H&Q 2001 estimated growth rates for both JDSU and CSCO are too low. Enough bean counting for today. And I repeat: Good luck to all tomorrow. Brian