Bubble 2?

adios · #1 10-04-2003, 07:44 AM

Key statistics for Yahoo. I lik Yahoo's business model a lot BTW and I think it is certainly a great business, however, what about these key stats from the Yahoo site:

Yahoo

Market Cap: 23.94B
Enterprise Value (mrq)³: 22.31B
Trailing P/E (ttm): 130.72
Forward P/E (1 yr)¹: 75.82
PEG Ratio (5 yr expected)¹: 3.61
Price/Sales (ttm): 20.31
Price/Book (mrq): 9.05
Enterprise Value/Revenue (ttm)³: 19.58
Enterprise Value/EBITDA (ttm)³: 97.02

A tad pricey perhaps?

EBAY (Another great business model IMO)

Market Cap: 36.82B
Enterprise Value (mrq)³: 33.67B
Trailing P/E (ttm): 113.61
Forward P/E (1 yr)¹: 52.48
PEG Ratio (5 yr expected)¹: 1.84
Price/Sales (ttm): 20.95
Price/Book (mrq): 8.15
Enterprise Value/Revenue (ttm)³: 19.94
Enterprise Value/EBITDA (ttm)³: 66.21

AMZN - Amazon

Market Cap: 21.00B
Enterprise Value (mrq)³: 20.98B
Trailing P/E (ttm): N/A
Forward P/E (1 yr)¹: 58.93
PEG Ratio (5 yr expected)¹: 3.58
Price/Sales (ttm): 4.46
Price/Book (mrq): N/A
Enterprise Value/Revenue (ttm)³: 4.7
Enterprise Value/EBITDA (ttm)³: 143.81

DELL

Market Cap: 89.50B
Enterprise Value (mrq)³: 82.22B
Trailing P/E (ttm): 37.22
Forward P/E (1 yr)¹: 27.99
PEG Ratio (5 yr expected)¹: 1.87
Price/Sales (ttm): 2.27
Price/Book (mrq): 15.80
Enterprise Value/Revenue (ttm)³: 2.15
Enterprise Value/EBITDA (ttm)³: 23.82

Perhaps Dell is selling at a more reasonable price.

Cisco

Market Cap: 144.24B
Enterprise Value (mrq)³: 130.40B
Trailing P/E (ttm): 39.98
Forward P/E (1 yr)¹: 27.01
PEG Ratio (5 yr expected)¹: 1.91
Price/Sales (ttm): 7.36
Price/Book (mrq): 4.99
Enterprise Value/Revenue (ttm)³: 6.91
Enterprise Value/EBITDA (ttm)³: 24.72

Qualcom

Market Cap: 34.92B
Enterprise Value (mrq)³: 29.97B
Trailing P/E (ttm): 48.30
Forward P/E (1 yr)¹: 30.93
PEG Ratio (5 yr expected)¹: 2.12
Price/Sales (ttm): 8.67
Price/Book (mrq): 4.73
Enterprise Value/Revenue (ttm)³: 7.61
Enterprise Value/EBITDA (ttm)³: 22.37

Intel

Market Cap: 192.76B
Enterprise Value (mrq)³: 173.98B
Trailing P/E (ttm): 54.00
Forward P/E (1 yr)¹: 27.26
PEG Ratio (5 yr expected)¹: 2.48
Price/Sales (ttm): 6.84
Price/Book (mrq): 5.25
Enterprise Value/Revenue (ttm)³: 6.39
Enterprise Value/EBITDA (ttm)³: 31.8

Microsoft

Market Cap: 314.57B
Enterprise Value (mrq)³: 259.25B
Trailing P/E (ttm): 30.98
Forward P/E (1 yr)¹: 23.55
PEG Ratio (5 yr expected)¹: 2.32
Price/Sales (ttm): 9.58
Price/Book (mrq): 5.03
Enterprise Value/Revenue (ttm)³: 8.05
Enterprise Value/EBITDA (ttm)³: 19.19

These are some of the blue chip NASDAQ stocks IMO, may have forgotten a few. If you go to smaller cap names even higher valuations. Anyway not exactly bubble 2 but how much upside is there if you are a long term buy and hold type investor? Put another way when are these fully valued if not already?

Ray Zee · #2 10-04-2003, 08:24 PM

it most certainly is bubble two. but as in the first who knows when it will break. no stocks can support those p/e ratios without fantstic growth for a long time. and all big stocks cannot possibly do it. tough enough for small ones.

have they started saying "its different this time " yet.

AceHigh · #3 10-12-2003, 07:20 PM

[ QUOTE ]
EBAY (Another great business model IMO)

Market Cap: 36.82B
Enterprise Value (mrq)³: 33.67B
Trailing P/E (ttm): 113.61
Forward P/E (1 yr)¹: 52.48
PEG Ratio (5 yr expected)¹: 1.84
Price/Sales (ttm): 20.95
Price/Book (mrq): 8.15
Enterprise Value/Revenue (ttm)³: 19.94
Enterprise Value/EBITDA (ttm)³: 66.21

[/ QUOTE ]

I too think the NASDAQ is overpriced, but I like EBAY. Still a lot of growth left for this company, I think.

I worry about Yahoo, seems to me Google has a better search engine. And I'm not sure how they will generate income aside from advertising. Getting people to pay for things on the internet that used to be free hasn't been successful for many companies.

Wildbill · #4 10-12-2003, 11:46 PM

Actually they have done well with that, they wouldn't have returned to profit without getting people to pay for services. Should be interesting, hard to say if people will break down and really pay more for this stuff. I get a sense it may happen, at least to some degree. I look at how the email services might work. For now everyone still offers it free and few people pay, but with spam making it easy to fill up an inbox in 2 days I think if any of them truly were able to cut down on spam they would suddenly have a lot of cash flow on their hands. Also the move to providing more business related services is a tough market, but business is never queasy about forking over small amounts of money like most consumers are. So yes getting growth could be difficult, but its a possibility. And with the situation unclear now, it could take quite some time before people conclude whether or not it works. I don't think people will suddenly wake up and start selling off the stock, it will be a gradual letting out of steam.

AcesUp · #5 10-12-2003, 11:53 PM

With respect to Yahoo!, I thought this article was very telling, and I'm surprised that more analysts aren't concerned with this particular Yahoo! revenue stream:

http://www.fool.com/News/mft/2003/mf...it=y&npu=y

Also, don't count MSFT out... [img]/images/graemlins/smile.gif[/img]

Ed Miller · #6 10-13-2003, 04:50 PM

Also, don't count MSFT out...

I think the abandonment of LookSmart (probably a good idea in my opinion) is the latest of many steps MSFT has undertaken to downsize its internet search engine operation. MSN Search will have now virtually no value-add for the user over the raw Inktomi results (especially if they have to terminate their relationship with Overture as a result of the Yahoo acquisition, though i think that would be so financially disasterous that I don't foresee that happening any time soon). This is just not an area that MSFT is aggressively pursuing. I think MSFT is content to leave MSN Search as an exercise in using the default IE search settings to generate a few extra dollars.

AceHigh · #7 10-13-2003, 08:41 PM

You are probably right, I haven't looked that closely at Yahoo!. I know initial signups were a little disappointing.

Aren't you worried about Google taking away a lot of Yahoo!'s traffic?

AcesUp · #8 10-14-2003, 12:43 AM

[ QUOTE ]
I think the abandonment of LookSmart (probably a good idea in my opinion) is the latest of many steps MSFT has undertaken to downsize its internet search engine operation.

[/ QUOTE ]

On the contrary, this is the first step towards MS attempting to rival Google and other competitors in the search space. MS is developing competing search technology that it will likely bundle as part of Longhorn (the next version of Windows).

The abandonment of the LookSmart contract is just the first step in MS entering a new market. You can trust me on this one... [img]/images/graemlins/smile.gif[/img]

The interesting thing is that this move by MS is likely to be the impetice Google needs to IPO (they're going to need the money to fend off MS as a competitor).

Wildbill · #9 10-14-2003, 01:31 AM

I don't think they are as leveraged to that as analysts think. If you put up good content and create a million reasons for someone to come to your site, the search function that started it all becomes less important. After all, you want the right searches to come to you. The guy just looking for something specific and doing a real quick search makes little money. Its those paid searches that make money in it and the person that is doing other things and is willing to spend time with a search looking for something not so specific is the one that might give you the clicks that make you money. For quickness and ease, Google is the place to go, but those searches generally make nothing for the site.