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

To: rkral who wrote (116174)	3/28/2002 4:48:05 PM
From: Rocket Scientist	Respond to of 152472

Yes, I think our models agree. I also get $39.94 (15%, 5%) and $23.51 (15%, 9%) for 2nd and 3rd MM scenario. Not sure why you wouldn't include the first (or zeroth) year's earnings, although by including it and going out to year 10 (or 30) I was incorrectly taking the NPV of 11 (or 31) years. Probably the right thing to do is take year 0 to 9 (or 29). BTW, if using consensus EPS estimates of $0.93 for year zero and $1.16 for year one instead of 0.9 and y/y EPS growth of 20% increases the NPV by about 4$. Anyway, the conclusion I reach from all this that MM was right in December to declare QCOM overvalued at 60$, but probably wrong to consider it so at <40$. Certainly, I would rather own QCOM between 30 and 50 (coupled with a call writing strategy) than any bonds I can think of.