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Technology Stocks : Network Appliance -- Ignore unavailable to you. Want to Upgrade?

To: HDC who wrote (4671)	10/6/2000 7:13:21 PM
From: Bob Kim	Read Replies (2) \| Respond to of 10934

Duncan, Kraemer's price target wasn't $109, Milunovich's was. Your assumption as to why it was raised is probably not very far from the truth. "Valuation: Our $185 target price for NTAP is based on our sum of the parts analysis where Network Appliance is 33% more profitable than comparable companies and should therefore trade at a premium. Software is a key component in storage and Network Appliance's position is very strong from a software perspective. However, in our analysis, we discount Network Appliance relative to Veritas. Our target represents a multiple of 46.4x next twelve months sales estimates and 424.2x next twelve months EPS estimates. Currently, NTAP is trading at 34.6x NTM revenue estimates and 316.1x NTM EPS estimates. Our target price represents a price to sales multiple slightly above the past year's average and a price to forward earnings multiple at the high end of the past year's trading range."