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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (42498)	5/16/1998 9:57:00 AM
From: Ted Murphy	Read Replies (2) \| Respond to of 176387

I like Dell machines, and I recently bought a bunch of them for my web site. Also, I admire Michael Dell. But here is my response to your note. Dell has been growing rapidly, but its not realistic to expect a company with $12 billion in revenues to grow sales at 40%/yr over a 3-5 year period. Also, Dell's product is basically a commodity, and they have very powerful competitors who have all decided to protect their market share. Dell is not going to grow their revenues at 3-4 times the rate of the overall PC market over the next 3-5 years. Absolutely no way. They'll be lucky to keep it up through the end of 98. I'd calc the PEG for the S&P 500 at 22/7, or around 3.14. That's useless for valuation. More useful is the observation that Dell is now selling at 45 times forward estimates, a higher multiple than Microsoft and a far cry from their 8 multiple two years ago.