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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: sam who wrote (60053)	11/3/2000 8:44:19 AM
From: Dan3	Read Replies (3) \| Respond to of 93625

Re: Edelstone reiterates his STRONG BUY rating and $200 target price; believes Samsung licensing agreement should force remaining DRAM makers to cave in; raises 2001 estimate to $0.55 from $0.45 on likelihood of additional licensing deals. Impressive numbers. A P/E of 25 with earnings at $0.55 yields a stock price just under $14. If 55 cents represents 40% of the market having signed, then if Rambus gets everyone to sign, their earnings would be $1.38 per year. Once they have nothing left to win, a more reasonable P/E would be 15 so the stock price could be expected to be around $21. Questions? Comments? :-) Dan PS - Notice that Eddlestone thought the $0.55 represented earnings after additional companies signed, the numbers above are actually slanted in Rambus's favor. I may have sold those puts waaaay too soon.

To: sam who wrote (60053)	11/3/2000 9:02:10 AM
From: Zeev Hed	Read Replies (2) \| Respond to of 93625

Sam, I do not understand how h gets only $.55 for fiscal 2001. I have at least 50% of the DRAM market bearing royalties as we write. I have next quarter at better than $.23, next year surely should exceed $1.00, I would say by a big margin. Zeev

To: sam who wrote (60053)	11/3/2000 9:30:39 AM
From: sam	Respond to of 93625

Just some ramblings here. I think its rather obvious that RMBS will be earning a significant amount more than $.55, so perhaps Edelstein is giving them some room to -- ahem -- beat the street. And "grow" at a rate that warrants a VERY generous PE. In addition, remember, his previous guidance was $.45. So, in fact he is increasing next year's earnings by 20%. More importantly, imo, what does he have for 2002...since that should still be the more appropriate short term gage of RMBS price action TODAY. With that we can get a sense of growth trends...which would be helpful for determining today's price (minus the appropriate discount). In other words, I'm not sure a PE of 15 is a realistic appraisal of RMBS growth prospects (at least today). fwiw