Ben

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Fri Sep 7th 15:22 PM | Rating: 0 0
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Morningstar: Stealth Growth Stock

Good article and good company with good fundamentals (marings, recurring revenue, etc), I just have some questions about your modeling. An average growth rate of 35% for the next 5 years and 15% for the 5 after that seems pretty aggressive to me.. What are you basing these numbers on? The analyst that covers/ed this stock only had it growing at 17.5% next year. Yours are quite a bit above his... How did you calculate your cost of Equity for the WACC of 8.1%? This seems extremely low for a co. with no debt. I would expect something atleast in the 11 to 12% range. A WACC off by 300 to 400 bps would really screw up a DCF. I guess a PE of 33 still seems high to me also.
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