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

To: H. Bradley Toland, Jr. who wrote (125973)	12/11/2002 2:37:25 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 152472

PE is nowhere near 30-40 according to S&P core earnings. have you ever wondered why this co supposedly has great earnings all the time and yet their retained earnings are so low (relative to their cumulative pro forma earnings)? this is one of the many reasons i dislike cos that rely on pro forma figures. imo better to assume current PE is 60 (this is still too generous imo) and PE in 3 yrs is 15 and earnings growth will be 10% for 3 yrs. so they make about $0.88 of core earnings in yr 4. apply 15x multiple to this and you have price of $13.31 in yr 4, so i would put NPV around 9 bucks assuming 10% expected return. this is by no means a worst-case scenario imho. worst case imo is China completely balks on respecting QCOM IPR, and it becomes apparent that nobody will pay QCOM royalties on CDMA after 2008 or so, or whenever their key patents expire.