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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (111862)	1/29/2002 10:43:10 PM
From: pyslent	Read Replies (1) \| Respond to of 152472

As an investor, I find that it's easier to project what the market will be rather than assume growth rates, which is always dangerous. What will the market look like for QCOM products in 2006? I think i speak for all QCOM enthusiasts when I paraphrase that question to: how many cell phones will be sold per year worldwide at that time? From the other thread: Message 16980589 "we're talkin' maybe 4 or 5 hundred million CDMA handsets, with most of the high end and many devices." That gives QCOM about $5 eps (give or take a few pennies for the 20 million or so PC cards, specialized devices, etc). Assign a reasonable PE of 25, and we get a share price of $125. If they achieve that by 2006, its a 27% annualized return from today's levels. Most QCOM investors probably see this as a reasonable scenario. Of course, there are potential upsides and downsides. To Mucho's credit, when QCOM was at $65 just a month ago, the expected return on the above scenario drops to a 15% annualized return. Mucho is right; a good investor is compelled to evaluate the net present value of his holdings so he can recognize when a stock has gotten ahead of itself. I'm a huge fan of QCOM, but if it hits 200 on hype, I want to know that it's time to sell!

To: Wyätt Gwyön who wrote (111862)	1/29/2002 11:07:51 PM
From: SKIP PAUL	Read Replies (1) \| Respond to of 152472

There is an inconsistency in your position. You think that we were in a bubble but you still expect bubble type of returns. Historical market returns are about 8%. With short term interest rates at 2%, I say 13% expectation is unreasonable. Specially for a company with the market position that QCOM has. Also 10 years is too far to forsee. 5 yrs is my preference. QCOM's normalized base earnings in 2001 are about $1.13 if you adjust for the discontinued Globalstar operations. Also, how do you value a new triple digit growth business such as wireless internet that will start in H2 2002? I expect local wireless ISP's to proliferate over leased and unlicensed spectrum all over the landscape through out the globe. This business is potentially significantly larger than the voice business. This business is producing no profits at the moment only very large expenses in R&D and SGA.