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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Sonki who wrote (11050)	9/10/1998 8:15:00 PM
From: E_K_S	Read Replies (2) \| Respond to of 64865

Hi Sonki - My analysis for my target price of $89 (by year end 1999) was based on two additional new growth segments that would kick in late 1998 and early 1999. I estimated that FY 1999 SUNW would earn $2.89 based on current server growth only. The consensus is $2.72 (year ending Jun 1999). Since then two additional revenue growth areas are emerging and will add significantly to 1999 and 2000 earnings (IMO). The storage segment revenues should show significant positive contributions in the quarters ahead. With the recent announcements regarding SOLARIS NT migration/compatability only confirms that SUNW is well ahead of schedule. It is just a matter of time that these revenues and earnings will hit the bottom line. My guess is that they could contribute as much as $0.50-$0.80 per share(or more) by the end of 1999 or early 2000. The second new revenue stream which IMO is still several quarters away, is from the embedded systems group (JINI and JAVA). If SUNW can begin shipping their set top boxes by late 1999, I estimate that another $0.50-$0.80 per share can be achieved from this segment. Therefore by the end of 1999, it is possible that SUNW could earn $2.72 from their server/hardware, $0.50-$0.80 from their storage division and $0.50-$0.80 from their software group (specifically the embedded systems group). That's $3.72-$4.32 begining 2000. If the market prices SUNW based on future earnings (ie. FY2000) in 1999 and we assume a PE of 20, an argument for a high price target of $75-$86 can be made. I know it is still a very optomistic target but that is why we have long term investors in the market. I truly believe SUNW will achieve their growth goals for their storage division but I am not convinced yet that their software division is on track. In any case, this is the way I see it developing....As always this is subject to change but so far SUNW appears to be on track. I am looking at SUNW 2000 leaps strike price $65 symbol=LSUAM The current price quote is $4 1/4 x $4 3/4. This looks very atractive. On any significant market sell off, I may just purchase some of these calls. EKS