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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: Allen Benn who wrote (2557)	12/21/1997 7:44:00 PM
From: mac	Read Replies (1) \| Respond to of 10309

Allen et al: I just got a chance to read the Nov 20 analysts' reports, and I have a question re. something in the H&Q (Sheil Ennis) report. They made 2 distinct points: 1. Their earnings estimate do not include I20 estimates. 2. The forward PE, at 50 times next yr's earnings, was high (albeit deservedly so due to I2O potential and good visibility) and that price appreciation will be earnings driven etc etc. Since next yr's estimate doesn't include I20, surely that analyst must have some private estimate that would bring down the forward PE in their own minds, at least enough so that they wouldn't feel that a "high PE" warning was necessary. For instance, if I take next years consensus of 85c and add 20c for I2O (arbitrary number which I think is small) then the forward PE (with the stock price at 40) is <40. Since the earnings then have a forward growth rate of ~60% (jump from 65c to 105c) then surely the forward PE is low, not high? Can anyone make sense of H&Qs logic for me? Thanx :) mac