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

To: Marc Schiler who wrote (3273)	3/12/1998 8:29:00 AM
From: REH	Read Replies (2) \| Respond to of 93625

A P/E of 130 is not unrealistic in 1999 due to the fact that Rambus will be far from mature by that stage. However, as an investor the more realistic P/E of 30 should be used as a basis for analysis. This is exactly what I did in the analysis that rendered a 10 times potential over 3 years. My estimates do take into consideration large amounts of competition from existing solutions (DRAM and EDO) and also from newer technologies - this is why I used 10-30% market share for the next 3 years. Again I would point out that in my projections, both the royalty percentage (1.5%) and market share (10-30%) is less than what Rambus and H&Q estimates. Taking only the P/E of 30 estimates my calculations (and they are of course only estimates!) show: 1999: Market share: 10%, Stock price: $ 65.00 2000: Market share: 20%, Stock price: $ 173.00 2001: Market share: 30%, Stock price: $ 324.00 2002: Market share: 45%, Stock price: $ 608.00 Again, above numbers based on P/E of 30 which I think is very low for 1999 and 2000 and more realistic for 2001 and beyond as the company enters a more mature face. A P/E of 70 in 1999 and 2000 would give a stock price of $ 151.00 and $ 403.00 respectively (using the same variables as earlier). My conclusion is strong buy at todays prices. Q1 I believe will show $ 0.07 - $ 0.08 with much stronger earnings coming towards the end of 1998 and beginning 1999 as products roll out in volume. There is also a huge upside potential from the DTV-market not at all considered when estimating the size of the semiconductor-market. The above is only my opinions and estimates , other opinions are welcome!