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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: cheryl williamson who wrote (38380)	11/29/2000 5:27:23 PM
From: A.L. Reagan	Read Replies (3) \| Respond to of 64865

Simple valuation metrics per Multex consensus estimates on SI. EPS for FY 2001 (ends 6/01) vs. 2002 show 25% growth. Numbers shown are $1.40 (FY '01) and $1.75 (FY '02). In a normal historical market this translates to a P/E in the range of 35-40x, assuming the growth rate is sustainable. If we average the FY '01 and '02 estimates, in order to derive a 12-month forward earnings number, and multiply by a P/E of say 37.5, the result is $59-1/16; $63.00 @ 40x P/E; $70-7/8 @ 45x P/E. Above 45x, not realistic given general revaluation we are seeing. The 25% growth per the consensus numbers is not unreasonable given the issues we know about in the U.S. The rest of the world really ain't that great either. 40% YoY growth is hallucinatory in the current environment.

To: cheryl williamson who wrote (38380)	11/30/2000 4:49:51 AM
From: JDN	Read Replies (1) \| Respond to of 64865

Dear Cheryl: Well by now you likely have heard of Gateway announcement. That will be another nail in the valuation coffin, throw in the general market conditions and looks to me as though we are in for further downward spiral. I do believe AG will drop interest rates but I dont think it will happen in December. Frankly, at this point I would be happy to see them just announce they no longer have an inflation bias. But, when they do drop the rates they need to remove that 50 basis point increase they put in last as it never should have happened. JDN