These two scenarios represent my view of a VERY STRONG H-2 and his view of just a STRONG H2...These numbers use the mid-points of each of our growth ranges and likely set the proper range for the rest of 2013...Please note that I've been pretty close to bullseye for all (3 of last 4 Q's) other than my Q1 EPS estimates thus far (but I think we all took a Mulligan on Q1). My Q2Q growth rate is 25-30% and my colleagues is 12-14%, so I think this gives a pretty good and reasonable EPS range to set your clocks by. PLEASE NOTE that both of these estimates use mid-point of our respective range (mine 27.5% and his 13%) AND BOTH USE ONLY NON-GAAP NUMBERS, which is the measure used by most analysts for period comparison purposes. These are first pass, NON-MODELED numbers which I will post probably early next week (a lot of work) IF there are any material deviations from what is below:
My estimates using 27.5 Q2Q growth rate:
Q1 $ .78
Q2 $ 1.35
Q3 $ 1.72
Q4 $ 2.20
Total $ 6.05
Versus my colleagues mid-point of 13% growth.
Q1 $ .78
Q2 $ 1.35
Q3 $ 1.53
Q4 $ 1.72
Total $ 5.38
NOTE: Not so coincidentally, this range of $5.38 to $6.05 EPS 2013 maintains my prior $5.50 estimate right smack in between the two endpoints.
I believe MOST of the variation between our two estimates comes from two different views on HOW PRODUCTIVE the cadry of new reps were in Q2 PLUS/MINUS additional reps (and any reasonable gains and losses to rep #'s during these periods). My view is that on average they were 70-80% productive during the quarter (though less at the beginning and more at the end) and that they'll hit 90-95% productivity in H-2. I also built in both learning curve and lag factors due to reasonable "sell cycle" windows for this level of complex "sale". My colleagues estimates would suggest that we've already seen most of these lag factors come to maturity in Q2, thus lowering the incremental potential in H2 somewhat.
with recent surge in price, it may behoove us to take another look at MaxDad's forward estimates of Q's earnings. With the exception of 1Q13, which was a complete aberation, he has been "dead-on"! Put whatever multiple you want on Max's 2013 estimates but Q is still very undervalued even after the recent "blast off"!
Sentiment: Strong Buy