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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: bambs who wrote (40165)	9/27/2000 10:03:33 PM
From: The Phoenix	Read Replies (1) \| Respond to of 77400

Do you know why it's easy to calculate your numbers...because they are not well thought out. You must admit that when I present your forecast as above, next to the historical actual revenue and earnings growth rates they look very silly. And you wonder why people respond the way they do to you. If you can't be constructive then it's best to say nothing. Don't be surprised if you get some not so nice comments back. The truth is, while your analysis may be right, and while you could have made a point, it's all lost due to the fact you've taken a fairly nasty way to present them.

To: bambs who wrote (40165)	9/27/2000 10:19:04 PM
From: jerryrom	Respond to of 77400

15% earnings growth rate over the next 5 years? I don't think so. The actual projected earnings growth rate over the next 5 years is 32.4%. Projected earnings in 2005 is $2.24 . At a PE of 60, price per share is $134. But if Cisco trade at 60X projected 2006 earnings, price per share will be over $165 in 2005. That is about a 25% yearly gain over the next 5 years in Cisco's stock price based on today closing.

To: bambs who wrote (40165)	9/27/2000 11:37:19 PM
From: RetiredNow	Read Replies (2) \| Respond to of 77400

OK, Bambs et al, you guys are going to love this forecast. I calculated operating cash flows per share from 1996 through the present, then calculated price per operating cash flow per share, and then extrapolated through 2005. This way no one can argue about EPS distortions. This is pure cash, boys and girls. Here are the results. Read it and weep, Bambs. :) FYE RevRate Rev OCFRate OCF/Share P/OCF/Share Price Jul-96 4.1 0.18 14 2.56 Jul-97 57% 6.4 39% 0.25 24 5.89 Jul-98 32% 8.5 88% 0.47 34 15.96 Jul-99 43% 12.2 34% 0.63 49 31.06 Jul-00 55% 18.9 54% 0.97 67 65.44 -------------------------------------------------------- Jul-01 50% 28.4 50% 1.46 50 72.75 Jul-02 45% 41.1 45% 2.11 45 94.94 Jul-03 40% 57.6 40% 2.95 40 118.15 Jul-04 35% 77.7 35% 3.99 35 139.56 Jul-05 30% 101.0 30% 5.18 30 155.51 FYE=Fiscal Year End RevRate=Revenue Growth Rate Rev=Revenues in billions OCFRate=Operating Cash Flow Growth Rate OCF/Share=Operating Cash Flows per share P/OCF/Share=Price per Operating Cash Flows per share Price=Actual/Forecasted Price

To: bambs who wrote (40165)	9/28/2000 8:07:11 AM
From: Monty Lenard	Read Replies (3) \| Respond to of 77400

bambs, since everyone is throwing around valuations here is one to consider. CSCO must grow earnings at a rate of 31.6% annually for 10 years to justify its current stock price of $57.31. If we assume initial earnings of $2.67 billion grow at a rate of 27.29%, and we discount those future earnings at a rate of 11.00%, we arrive at a net present value for the company's next 10 years of earnings of $61.1 billion. To account for potential earnings beyond the 10th year, we estimate a growth rate of 6.00%, a discount rate of 12.00%, and we arrive at a continuing value of $223 billion. To complete the calculation we add these two figures together, subtract the long-term debt for CSCO ($0), and divide by the outstanding shares (7.02 billion) to get a per share intrinsic value of $40.40. Monty