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Technology Stocks : Power Integrations (POWI) -- Ignore unavailable to you. Want to Upgrade?

To: Bobo who wrote (9)	1/27/1998 12:41:00 AM
From: Clam Clam	Read Replies (1) \| Respond to of 449

First Call does mislead it some but it was still a blowout. The fully taxed (35%) estimate was for $.11 and they did $.15 (at 35%). I double checked it against Montgomery's model: Montgomery had estimated $.10 on $13.7mm revenues yielding pretax income of $1.86mm. PI reported $.15 on $15.5mm with $2.4 pretax income. As far as estimates go, there looks to be upside in both revenues and margins. The company's goal is 18-20% operating margins, they just reported 17.3% and estimates in 1998 call for 14.8% op margins. Then they are looking for 30% revenue growth when PI just reported a Q4 increase of 92% Y/Y and 16.4% sequential. $70mm (52% growth) with 19% operating margins gets you $.71 for 1998. At 25x EPS, that is an $18 stock. Assuming 40% growth and 19% op margins in 1999 gets you a $25 stock. Q1 is the key quarter as analysts are expecting a 10% sequential decline. MOT is a huge customer so they seem to be giving PI a lot of room there. ERICY might become a customer which, if combined with some MOT reorders, gets you $.02 - $.03 upside which then gets the full year estimate from $.50 to $.60 just after Q1.