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Radware Ltd. (RDWR) Message Board

  • kdp2561 kdp2561 May 11, 2000 10:42 AM Flag

    Full year earnings of 0.20 is too low

    an estimate. This is the MINIMUM earnings this
    year IMO. Last Q's earnings were 0.05. Are you guys
    saying that you expect earnings to remain flat?! I don't
    think so. The company has been growing revenues at 30%
    Q/Q. Last Q's revenue was 6.5M. So, assuming the same
    Q/Q growth rate for revenues gives: 6.5M, 8.45M,
    11.0M, and 14.3M. Last Q we made 856,000 profit on that
    6.5M -or 13.17%. If we assume the same margins for
    each other Q this year then we get:

    6.5M 856,000
    8.45M 1,112,865
    14.3M 1,883,310
    Total = 5,300,875

    Let's see
    we got $856,000/(# of shares)=0.05 or (# of shares)=
    17,120,000. So, assuming all things remain equal the total
    earnings for the year would

    5,300,875/17,120,000= 0.31

    This is the MINIMUM! Otherwise the
    company is no longer growing Q/Q at its current rate and
    the proper valuation would have to be recalculated.

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    • I agree that brokers estimations is too low. They
      like to leave some space to a positive surprise. I
      would be more cautios about using the same net profit
      percentage for all quarters. Having more than 80% of gross
      margin enables ro increase percentage of earning when
      there is a significant growth in sales. It is not
      logical that S&M sales will grow at same percentage as
      sales. So there is high probability that Q/Q growth in
      sales will increase 2000EPS to even above $0.31

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