Remember RIMM at $108
Do you remember back in Sept of 2007 when RIMM was expected to go to $108 per share?
This is from one of my first blogs back when I first joined Motley Fool ; RIMM was $90 and expected to go to $108.
I was trying to warn those (back in 2007) who were investing in Research in Motion that in 2010, using the same formula that put it at $100 per share would also put it at $52.39 in 2010.
dpdoor's Blog Sept 20 2007, it got only one Rec.
.......It’s price is based on its growth trajectory. If it grows at the same rate as the last year for 3 more years then flattens out, the annual eps will be $3.49 , if it’s growth comes down to the normal good business (3 years from now) then the p/e will be 15x and the share price would be $52.39, (3years at 47% growth and then 15% growth as it matures)
So you can see how the analyst get price targets from $50 to $108 (and one at $120 but they did not give any plausible reason for their estimate.) It could be worth $109 for a few months if they hit their best numbers then go to $50 (3.49 x 15) over the next few years. [end of Sept 20 2007 blog]
NOTE IN 2010: RIMM is at 52.23. in 2007 I estimated it would be 52.39 in 2010; it should go up 16 cents.
[note for 2010; can the same can the same math applied to SBUX?]