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Technology Stocks : TLAB info? -- Ignore unavailable to you. Want to Upgrade?

To: Jeff Jordan who wrote (3951)	9/25/1998 12:05:00 AM
From: Jerryco	Respond to of 7342

Interesting analysis posted in the Yahoo thread: Previous Next -> Message 3088 of 3090Reply Seerwizard - $1.80 will be no problem for TLAB....baileyg97 Sep 24 1998 9:11PM EDTLet's walk through this in a very simple way: 1. TLAB earned .37 in Q1 '98, .46 in Q2 '98, and let's just go with flat earnings with Q2 of .46 for Q3. That brings us to $1.29 YTD. Remember, Q3 for the telecom equipment makers has historically been a slower quarter. Factor that in with all of the Asian problems and I really think TLAB deserves a pat on the back for .46 for this quarter. We get spoiled into thinking that because a company typically beats consensus estimates that it will occur every quarter. Just doesn't happen that way. Even DELL's run will come to an end sometime. 2. Assuming the above, we need .57 to achieve $1.86 for the year, and .57 is the estimate for Q4. I'll go out on a limb and say TLAB will come in at .64 for Q4, so that takes us to $1.93. So, to answer your question, I personally am VERY comfortable with analyst expectations and would be really surprised if we came in anywhere under $1.86. 3. Now let's look at P/E, a topic that is quite subjective when discussing what a particular stock deserves to be trading at...you have LU trading at a P/E of 45 (FY 1998). If you took that same P/E and applied it to TLAB, you get a value of $83.70. Granted that may be a little heafty at this time for TLAB, let's factor that number into FY 1999 estimates of $2.35 and you get a value of $105.75. I've done some calculations in the past few days and some extensive research and to summarize a fair P/E for TLAB right now, I came up with 35, giving us a FY '98 value of $65.10 and a FY '99 value of $82.25. THIS IS MY OPINION, please bear that in mind...but I will add that this P/E is on the conservative end of my estimations. Research it yourself and see what you come up with. Although we closed near the day's low today in a weak market, I like what we are seeing. TLAB has made a strong push in the mid-morning hours for the past couple of days before pulling back. This is a good sign as #1 we are establishing that base I was talking about and #2 we are building up some good steam to push through the low $50's whenever that may happen. The tides have turned for TLAB after the debacle over the past 6 weeks. Have fun and keep doing your research!! Regards, bailey