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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Seb Maitra who wrote (14715)	4/13/1998 8:43:00 AM
From: Mr Logic	Respond to of 31646

Seb, I would be interested to know why you think >>I think it's extremely likely that TAVA will earn about $200 million in FY 1999.<< (I think you mean revenues not earnings). That is an amazing projection from $1.7m Y2K sales last quarter. Do you think they will average $50m/quarter?? >>psr of 8, average 30 pe etc.<< >>The question however remains that how TAVA is going to convince the Street about its long term game plan so that the Street will not have a problem assigning it a 30 pe. I think a great management like Jenkins...<< Seb, John Jenkins has already answered this for you in the last conference call. He says that they are not going to get up to 6-700 people then cut back in 2002. So say by 2001 they get to 500 employees, or about 350 engineers. Have them all working at 80% for $1,200/day (generous enough I think) and you've got $84m annual revenues. Work on the basis that Jenkins can turn around the profit situation (TOPRO made a loss the last 5 years) and get to a very healthy 10% net margin - $8.4m. P/E of 30 is VERY generous, but whatever - you are looking at a $252m market cap - not much over $10/share. It's a clumsy and incomplete cut at the numbers but a reasonable guideline. And I think I've been optimistic at every stage. Cut back at any stage and $5 comes easily into view.