Given this timing and uncertainty of the outcome of the appeals process, we are reluctant to respond to requests we have for breakup valuation. But using just a 'back of the envelope' valuation, based on current revenue multiples for comparables to each business unit, we would assign a 15x revenue multiple to the Windows business unit and a 17x revenue multiple to the applications business.
More Quotes from Chris Shilakes:
I'd be surprised if the strain was localized to Asia. Most of the survey work that we've done leading up into the end of the quarter also indicated that business was quite difficult in the U.S., and I wouldn't rule out a miss in Europe as well.Chris Shilakes
We are leaving our fiscal 2001 estimates and 87 12-month price objective for Microsoft materially unchanged, following fourth-quarter results that were largely devoid of the drama of the past two quarters. Nonetheless, 'caution' remains the operative word from Microsoft management, as continued choppy monthly unit demand from business PCs and a deliberate, gradual ramp from Windows 2000 platforms and related applications hinders near-term growth.
Chris Shilakes
Our model forecasts applications license revenue growth of 55 percent and database license revenue growth of 18 percent. We expect Oracle to deliver applications growth consistent with our model and database growth in-line to slightly better than our projections.
Chris Shilakes
We do not believe that investors should be buying MSFT on a breakup valuation criteria a breakup, if it were to make it through an appeal, would be executed three or more years from today, which is an eternity in the Internet-centric world. The legal overhang appears to be lengthening, unfortunately, for Microsoft.
Chris Shilakes
We expect Oracle could appreciate at a more tempered rate over the intermediate term as fourth-quarter ... license revenues were muted by sluggish database growth, with strong earnings-per-share upside on continued margin expansion.
Chris Shilakes
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