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Technology Stocks : THQ,Inc. (THQI) -- Ignore unavailable to you. Want to Upgrade?

To: StaggerLee who wrote (5759)	6/4/1998 12:41:00 AM
From: judge	Respond to of 14266

Stagger, I agree with some of your points. The investment community is looking at thqi's future revenue growth. Bottom line thqi will be in the doghouse if they don't replace "WCW revenue". In defense, they have come up with great games in the past and they have plenty of cash and almost a year to get the pipeline flowing. still long j

To: StaggerLee who wrote (5759)	6/4/1998 12:52:00 AM
From: Jeff Bond	Read Replies (1) \| Respond to of 14266

Stagger, >>In any event, in 1998 you're paying about $90 million more for THQ (based on current mkt cap vs. year ago) for an extra $5.4 of non-WCW revenues this quarter.<< Doesn't this condition only remain valid if the upcoming revenue stream remains consistent with the prior quarter? Doesn't this condition assume there will be no new revenue stream generated for new releases as they become available? I follow your PSR analysis, and fundamentally agree with the general idea you presented. However, I don't necessarily agree with the assumption that the historical value of 2 x sales will necessarily hold, especially given the growth THQI has experienced the past year. It also seems unrealistic to simply use the current PSR ratio in your calculation, since it varies quite a bit throughout the year, A slightly more realistic approach might be to use the average PSR for last year. Also, the PSR model is fairly reliable when analyzing larger companies in mature markets, but it can fall apart qucikly when analyzing smaller companies in the high-growth stage of the business cycle. A final note on PSR is simply that based on sentiment in the investment community as a whole, the relative PSR of the industry group as a whole can vary quite a bit, depending whether the group is currently in or out of favor. How do you factor this in, or do you simply relate your analysis to THQI, regardless of general sentiment? I can see you think about this, have you really thought about it though? What do you use to estimate and forecast the upcoming sales figures for future products, and what are the estimated sales figures, margins, and revenue for each of these upcoming products? Regards, JB