Wave Systems Corp. (fka WAVXQ)

[toro1]

Vacay - interesting.....

"Our $5.40 price target is based on a 6X Price/Sales multiple of estimated FY 2007 revenues".

Backing into Sales(revenues)

If $5.40 = 6x sales

Then FY 2007 sales = .90 per share

Revenues then = .90 per share x 42.18 million shares = $37,962,000 FY 2007 revenue.

Estimating earnings -

Let's guesstimate a accelerating burn rate Q1 6M, Q2 7M, Q3 8M, Q4 9M or FY 2007 $30 million, yielding $7.962M FY 2007 earnings or $0.19/share.

What P/E will the market give a small company at the epicenter of the next big thing with accelerating earnings. The Red/Chip estimate of $5.40 equates to P/E of 28 in the above scenario.

Could be low - I don't know.

Happy New Year to All,
toro