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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: REH who wrote (3265)	3/11/1998 10:44:00 AM
From: Ken M	Respond to of 93625

I agree your extrapolation is very rational.

To: REH who wrote (3265)	3/11/1998 1:07:00 PM
From: TEColeman	Read Replies (1) \| Respond to of 93625

REH, I believe your numbers are too optimistic, but I will concede that RMBS could do well, assuming no competition. Your Assumptions: 1) I don't dispute your size of the semiconductor market in 1999 or 2001, but where did you get these figures? 2) Why do you believe RMBS will have 10% market share (8 billion)? That values them at something on the order of a Texas Instruments in 1 year? 3) Your assumption of 2.16 EPS is equivalent to 40% profitability! Name another company with profitability that high. 4) P/E ratios of 130 are way out there, and rarely stay that high. That is typical of promising start-ups, but once growth is estabilished will fall down to a more realistic P/E commensurate with the yearly earnings increase (ie. PEG of 1.0). 5) Your assumption for 30% market share puts them at 37.5 billion, again this seems excessively high. 6) Do the calculations for PSR, these put RMBS way up in the 30's, no self respecting fund manager could go for a company that high (which is not to say that individual investors wouldn't) TEC