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Technology Stocks : MWAV-M WAVE COMM -- Ignore unavailable to you. Want to Upgrade?

To: FIFO_kid2 who wrote (317)	7/25/2000 10:00:34 PM
From: Tom Hua	Read Replies (1) \| Respond to of 443

Jeffrey, as much as shareholders were pleased and pleasantly surprised by the excellent report today, I think the next report will be another blow out surprise. It's really not that hard to make projections using just 2 data points, ie., backlog and net income as a percentage of sales. Also keep in mind that management has a history of being ultra conservative with their forward looking guidance. Let's go back 1 quarter. Backlog at the end of Q1 was $9 million, net income was 3.1%. The company's guidance for net income was 3-6% for Q2. Today, they reported Q2 revenue of $11.9 mil, 33% higher than the backlog at the end of Q1. This is consistent with the fact that backlog is delivered in 8 to 9 weeks time frame. Net income was 6.3%,exceeded the top of the range. Today, we know backlog was $15 million on 6/30, the CFO's new guidance for net income is 5-8%. So, here's my prediction for Q3: revenue = $18 million net income = $1.45 million (8%), or $0.63/share It's too early to project Q4 numbers, so my wild guess is net income of $0.85/share in Q4, bringing total EPS to $1.88/share for the year, and total revenue of $60 million. There's a good chance the company will pick up WS coverage in the second half. Given the company's flawless execution, impressive proven success, and phenomenal growth in both top and bottom lines, analysts will most likely value the stock with a PE of no less than 40 and 12-month price target = $75. Regards, Tom