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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: Alfredo Nova who wrote (15695)	8/5/2000 10:53:43 PM
From: KevRupert	Respond to of 21876

Alfredo, I agree completely regarding your thoughts. I've seen a few research reports (including ML's), and I am very impressed. My anticipated figures include the following: 2000 EPS: $1.12 = 37.9x current P/E ratio 2001 EPS: $1.33 = 31.9x forward 2001 P/E ratio Of course, these figures are based on conservative estimates, and do not factor in the effects of the spinoffs. Check this review on Lucent: quicken.com 1) P/E LU's price/earnings (P/E) ratio is 77.43% lower than the industry average, which indicates that investors are buying LU's earnings at a significant discount. This lower valuation may indicate a bargain but could also represent the market's low expectations for the company. Since earnings tend to fluctuate and can often distort the P/E ratio, confirm the valuation by looking at price/sales and other similar ratios. Also notice how P/E has changed over time. 2)P/S LU's price/sales (P/S) ratio is 27.31% lower than the industry average, which indicates that investors are buying LU's revenue at a discount. This may be an indication of lower margins (ability to convert sales to earnings) or below-average sales growth. Compare profit margin, revenue growth and price/earnings to the industry to get a broader sense of how LU is valued in comparison to its competitors. 3) PEG No Ranking The industy price/earnings/growth (PEG) ratio for LU's industry is undefined. If, on average, the companies in an industry have posted losses or expect zero or negative earnings growth for the next 12 months, then the PEG ratio cannot be computed. You need to look at other valuation measurements, such as price/sales (P/S) to help place a value on LU. Always great to hear from you Alfredo. A man of reason. :)