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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: eric podell who wrote (4589)	3/13/1998 3:36:00 PM
From: RFF	Read Replies (2) \| Respond to of 6980

I've used a DCF model to value BAY and I get a $40+ valuation as well. The biggest variable is assuming a 25% growth rate for the next couple of years and then a slow down. I assume that that's about what the industry will do and believe BAY will actually do better. Also assumed some profitability improvement. Used a discount rate of about 15% because the stock does have some risk.....It's not that hard to get a $40+ value.

To: eric podell who wrote (4589)	3/13/1998 3:42:00 PM
From: Lerxst	Respond to of 6980

eric, When was the last time Bay "disappointed". By my recollection it was over a year ago, under different management. Or, are you referring to our inability to meet some over exuberant and undisclosed "whisper number"? Bottom line, IMO, the last four quarters have shown solid numbers and recovery by new management from the previous mis-management following the merger. While new management has built credibility with the street, it is limited, only 4 quarters of data. The more quarters Bay continues to execute, the more respect the street will give us. That takes time, time which hasn't yet passed. BTW, my take on the run up last fall was that it was too much, too soon on little to no solid information to support it. Just my perspective, Lerxst

To: eric podell who wrote (4589)	3/13/1998 3:55:00 PM
From: rupert1	Read Replies (3) \| Respond to of 6980

Eric: Analysts are predicting annual growth of between 25-30%. BAY has already executed the upper end of this range in some product lines. Reaction to new and upcoming product lines suggest that this will continue and broaden. I must disagree that BAY has disappointed time and again. Since the new management over the last 4 2/3rd quarters the only hint of disappointment was when the CFO announced after the first month of the 2ndQ in the Fall 1997 that revenues for that quarter were running ahead of estimates, or words to that effect. That caused the explosive run up in the price to 41. In the end, earnings for that quarter met but did not greatly exceed estimates. This disappointed the momentum optimists and the stock fell back. The idea that the Street knows something that BAY has not yet announced to the rest of us, or even to the analysts, is a bit silly. I realise that sometimes one has to suffer through these bouts of silliness. Good weekend to everyone from Europe! Victor