True valuation

True valuation

Posted Nov 5, 2003 0:13 UTC (Wed) by vmole (subscriber, #111)
In reply to: True valuation by error27
Parent article: On Novell's acquisition of SUSE

Let's see, based on the number in the LWN article above (very roughly, picking
specific values to make the numbers come out even, do the variations
yourself!):

SUSE: P/E = 210/35 = 6 - about right, maybe a bit of bargain.

RH: P/E = 2400/(35*4) = 17 - Woah!

Looks like a good time to get out of Red Hat stock.

(Which *should* have nothing to do with the success of the company,
unless they get more hung up on maintaining the P/E than on long term
profitabilty.)

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