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Post# of 704019
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Zeev Hed

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Zeev Hed

Re: langostino post# 157877

Saturday, 10/04/2003 1:15:13 PM

Saturday, October 04, 2003 1:15:13 PM

Post# of 704019
I think you underestimate what an increase in profit margins from the current $48/50% to the 55%/58% range can do, and for that the top line need not go up by much more than 15%, I see them growing over the next few years the top line from the current quarterly rate of about $7 B to about $9 B plus. That could bring their quarterly earnings to the $2.3 to $2.5 B or about $9 to $10 B annually, or about $1.40 to $1.50 per share. At the top of the cycle these earnings could easily "fetch" a PE 32 to 35 or around $45 plus per share. Still much lower than the PE commanded at the top of the last cycle. I just think that he top of the next cycle will be much earlier than you assume, I would not be surprised the top to be late next year.

AZH

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