RHT Long Term Value Only $27 - Sell It while it's in 40's
If we assume initial earnings of $150.2M grow at a rate of 17.97%, and we discount those future earnings at a rate of 15.00%, we arrive at a net present value for the company's next 10 years of earnings of $1.73 billion. To account for potential earnings beyond the 10th year, we estimate a growth rate of 6.00%, a discount rate of 12.00%, and we arrive at a continuing value of $3.42 billion. To complete the calculation we add these two figures together, subtract the long-term debt for RHT ($0.00 ), and divide by the outstanding shares (189.3 million) to get a per share intrinsic value of $27.
Billings alone isn't the issue with RHT. The CEO can say WHATEVER. Most of these guys are a bunch of lairs. Cramer dod not recommend it he said to make your own decision about it. At this price there is way more chance of loosing than gaining and it isn't worth the risk. If you just cant live without it, I strongly recommend to sell now and buy at half the price in 6 to 12 months.