For those of you who may have missed it, UNXL gave great guidance yesterday --in the form of the earnings estimates released just before the cc by Williams Financial. For a variety of reasons, ranging from sophisticated to sentimental, Reed prefers to let his fair-haired kid, Cody Acree, carry the torch and show us the way on earnings, and Reed has done this so often that I believe we can treat WFC as the alter ego of UNXL, The guidance is spectacular, even breathtaking -- $1.55 for 2013 and $4.49 for 2014, all fully diluted.. (Compared to my models, these are 50% conservative, but let's work with them.) The earnings growth from 2013 to 2014 is a whopping 189%. (If you work ahead with the production/pricing info provided in the cc, you'll readily calculate earnings for 2015 of at least $13 a share and YtY grown continuin,g at 189%.) Since the chattering shorts have scared most of you shatless, let's apply a P/E of only 50, which is low for this special situation. That gives a 2013 trailing earnings target of $77.50 and a forward target of $225, rising in 2014 to between $225 and $650 a share, depending whether you're a trailer or a forward thinker. For those who gasp in incredulity and may have subconsciously adopted part of the short these, take a look at Amazon, now carrying a trailing P/E of of 3,085, or Sales Force, now boasting a P/E of 5,173. And, by all means, consider the source: You longs have often damned me for being too hard on some of you for your misinformation, hyping, and pumping. You know I never intentionally do that: I call it as the numbers dictate. For more on this, read my post headed Are the Longs the Real Shorts Here. .
Indeed everything looks good. The shorts seem to want to fixate on shipping 50 units this quarter. These are samples. I personally don't mind them holding it down another quarter, more cheap LEAPS for me.
One of the analysts in the call asked a simple question as to what prompted the increase to 10MM capacity happening quicker than previously planned. Reed then mentioned negotiations , through their Eco-System partner, led them to take this aggressive step to dramatically increase their production capacity. 2 companies mentioned that we are in discussion with have capacity requirements of 100MM units/yr (everything) and 400MM smartphones/yr respectively. They must have heard something they liked in those negotiations. This management team has led us this far, no need to leave them now.
Al, WFC is using $156M revenue in 2014 for the $4.49. $156M revenue means 650K units pm x12x $20. Whereas mngt thinks they will be making 10M units pm by the end of 2014, which is 15 times vs avg WFC estimates and probably 10 times as much (avg monthly) vs what WFC is forecasting. Unless we think that UNXL CEO is crazy (then we should not invest in UNXL), WFC numbers are ridicously low. Why are you even using these numbers in your posts? If this is s soft bashing tecnique to accumulate, then I will not ask you anymore and I will join you to try and keep price down as long as we can :-)