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Technology Stocks : Loral Space & Communications -- Ignore unavailable to you. Want to Upgrade?

To: Rocket Scientist who wrote (4268)	8/14/1998 4:59:00 PM
From: Valueman	Respond to of 10852

RS: Sure--I'll speculate. SS/L has always been a difficult entity to value. You can't exactly take an EBITDA multiple like the sat constellations. It is low margin, but then again, it certainly has a lot of revenue. JPM values it at roughly half of revenues. That is certainly low, especially considering the franchise, the difficulty in setting up the same kind of business, and the key strategic place it holds in Loral's portfolio. One times revenue is about 6.50. Schwartz estimates that they will be doing $2.5 billion at 9% EBITDA margins in 2002. What is that worth today? Not 2.96. I'll stick with my number, and I am likely low. The Skynet/Orion/SatMex valuations are based on discounted cash flows for JPM, which depend on assumptions of your discount rate. I did the easy valuation of taking 10X EBITDA in the next year. JPM must have followed Loral's own expectations for Skynet in 99 of $300 million in EBITDA. They will not do that. As a matter of fact, I am probably high on my estimate. They give a value of 212 million to SatMex? Give me a break. What are 2 relatively new sats, plus one of the most powerful sats(SatMex5)in the America's worth? They say $424 million. I beg to differ. Orion's value is a strict exercise in 10X expected EBITDA in 99. G's price has declined from the time they did their report(it was 28+ then). They are discounting future cash flows on C to arrive at today's value. I prefer to wait for an idea of how the service executes its business plan. My valuation is ultraconservative, and still LOR is priced below it. So be it.

To: Rocket Scientist who wrote (4268)	8/14/1998 11:35:00 PM
From: Valueman	Read Replies (1) \| Respond to of 10852

I will have to redo Orion's valuation as well. It looks like Orion 3 will not be launched in 98, and put in service in January 99. Since the initial Delta III launch was delayed, so was the Orion 3 launch. Be a good little satellite and wait your turn! This may be offset though by Orion 2's earlier launch than expected. The press release says: "The 10-kilowatt Orion 2 satellite will be based on SS/L's flight-proven three axis, body-stabilized FS-1300 bus, and will have a mass of 3,800 kilograms, when it is launched aboard on an Ariane 44LP launch vehicle in May, 1999. The spacecraft will have a lifetime of 16 years." A May launch would be a month or so early. BUT, how SS/L could have a sat ready to go in approximately 14 months, I am not sure. A colleauge suggested they could be using the "carcass" of one of the cancelled Asia satellites. That may be.

To: Rocket Scientist who wrote (4268)	8/17/1998 8:00:00 AM
From: Jeff Vayda	Respond to of 10852

RS and Valueman: I wonder how often a number is reached and then reduced just for the sake that it is too far from the current price. Sure a lot od the 'wall streeters' are not shy about changing forecasts week after week but I tend to take a dim view on that. If I was staking my rep on published numbers, I would rather be conservative and hit them, rather than look bad for overestimating them. I think the numbers are reachable but I am sure many people look at the delta and say "No way in this market" and put there money in Lucent or some such. Jeff Vayda