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

To: JRI who wrote (120198)	4/23/1999 1:32:00 AM
From: GRANOLA	Respond to of 176387

JOHN & All: re:<And if Kumar is dead on: 45% rev. growth 50%+ earnings growth 55% EPS, .17 That is GREAT my friend. > REMEMBER: M Dell was quoted at the recent analyst mtg as saying something about DELL having healthy growth, albeit below 50% growth...of course it will be above 40%, probably 45-49%, otherwise he would have said "below 45%"...or "below 40%"...especially given that the last earnings report showed 38% growth (if I remember correctly). I told you all then that he was trying to tell us to keep the faith...we'll see in a few weeks...i'm betting 47%...sounds good to me :) Cheers, GR

To: JRI who wrote (120198)	4/23/1999 11:10:00 AM
From: BGR	Read Replies (1) \| Respond to of 176387

John, In effect, Kumar is looking for a 3-4% YOY ASP erosion. In view of IBM's 15% YOY ASP gain, this is entirely reasonable. I jested (in the Ask MB thread) when I said that I am salivating at the prospect of a flat ASP YOY, but many wonders are made possible by product mix shifts. If in fact DELL has been able to take some market share away from CPQ in the mid range server market, it is not entirely unlikely. Then there is the "big order" that was postponed in the last quarter and rolled into this one as well as gigabuys.com. So, the revenue growth seems to be in line. If, however, DELL hits 45% revenue growth YOY, I expect the earnings growth to be more than 50%. First, if there is a product mix shift, there may be a margin expansion. Second, as you had mentioned to me in PM, the IBM deal may cut licensing fees. Third, with DELL dipping hard this quarter, some share buyback may have happenned, which improves EPS. Finally, last quarter DELL had 55% YOY earnings growth on 38% revenue growth. Extrapolating and applying the above three factors, I would estimate a EPS growth in the 55%+ range, i.e. an EPS of 18 cents approximately. All this, of course, is pure conjecture. But I have gone over IBM and GTW's reports and found nothing that could be worrisome for DELL except for the fact the IBM has been aggressive in the corporate sector and has shown good results. However, even there IBM's product offerring compete more with CPQ than with DELL who are much lower in the hierarchy. Over all, things IMO look good and I just purchased some May 47.5 calls (which I most definitely should not have done as I do not buy front month calls on principle). -BGR.