Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: gdichaz who wrote (23274)	4/22/2000 5:58:00 PM
From: freeus	Respond to of 54805

Thank you. Great to see the numbers emphasized again. I.J. pretty much indicated the jist of this at the meeting but during downturns we have to be reminded and refreshed, don't we? Freeus

To: gdichaz who wrote (23274)	4/23/2000 5:33:00 AM
From: FLSTF97	Read Replies (2) \| Respond to of 54805

QCOM Valuation I'm not sure I am following this post correctly especially the logic about the 100x PE. Perhaps some of those on this thread that follow QCOM can clarify this better for me. The Q is hard (for me) to understand since their business structure has changed so often in the last few years. Thankfully they issued Pro forma numbers for the last quarter, which in my opinion probably presents the best opportunity to understand their business financially. Based (more or less) on the pro forma's I constructed the following. I've assumed 15% sequential rev. growth (to approx. the 74% yoy); an 0.5% sequential inc. in net margin to approx. the increase license, royalty contribution and then project a market cap on the current 708 million shares and a 50X PE (just double the cap if you believe 100x). YR Q1 Q2 Q3 Q4 Total YoY % change 2000 Rev ($mil) 564 649 746.35 858 2818 assumed 15% inc seq net margin 32% 32% 32.5% 33.0% Assumed 0.5% inc seq Earnings(mil) 178 207 243 283 EPS 0.25 0.29 0.34 0.40 1.29 est Cap $ bil 9 10 12 14 2001 Rev 987 1135 1305 1501 4929 assumed 15% inc seq net margins 33.5% 34.0% 34.5% 35.0% Assumed 0.5% inc seq Earnings(mil) 331 386 450 525 1692 EPS 0.47 0.55 0.64 0.74 2.39 est Cap $bil 17 19 23 26 2002 Rev 1726 1985 2283 2626 8620 assumed 15% inc seq net margins 0.355 36.0% 36.5% 37.0% Assumed 0.5% inc seq Earnings (mil) 613 715 833 971 EPS 0.87 1.01 1.18 1.37 4.42 est Cap $bil 31 36 42 49 2003 Rev 3019 3472 3993 4592 15077 net margins 0.375 38.0% 38.5% 39.0% Earnings(mil) 1132 1319 1537 1791 EPS 1.60 1.86 2.17 2.53 8.16 est Cap $bil 57 66 77 90 Note that Q1 2000 is a pure backwards fabrication based on the assumptions. On these assumptions it would appear that Q is valued out either until Q2 2002 (100X PE) or Q3 2003 (50x PE). If they consistently delivered 74% revenue and earnings growth (the above actually has faster earnings growth) it would seem reasonable to expect higher than 50x PE. As far as subscribers, it appears that the market is currently large enough to allow 75% growth for the next three years and then some (Europe and Japan willing!) The 2001 earnings don't appear to be a slam dunk to reach 2+ billion as the above growth assumptions are aggressive. The gross margin could increase faster than I projected, but I have no reasonable basis for projection really (not even for the 2% increase each year, but something needs to be factored in as license rev. grows which has a "90% plus" gross margin). FATBOY