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STEC, AŞ Message Board

  • Prince_In_Black Prince_In_Black Mar 29, 2007 6:35 PM Flag

    Fair Value of STEC is $14.7

    >>Looking 1 year out. Complete dead money from here. Do the math. That's $10 under the best possible assessment. And it is not suppose to happen until 2008.

    The Malaysian plant will add about 20 cents to the bottomline due to tax and labor savings. This quarter is the trough of the RAM prices as inventory gets worked off. 2007 reduced forecast will be 54 cents, still a decent comparison to 45 cents in 2006. Many semis will kill for that number. 2008 will fetch 83 cents, almost doubling the 2006 eps on a projected 29% reevenue growth. Just using this year's 54 cents and next year 83 cents, with the industry PEG ratio of 1.37, STEC fair value should be $7 X 1.37 X 83/54 = $14.7. The markets will price in the fair value 6 moonths out, say this summer for the projected 2008 growth. You are looking for a double (from $7 to $14.7) in three months. I won't call it a dead money.

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