Research In Motion (RIMM) Trades Like a Dead Man Walking
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With shares of Research In Motion Limited (Nasdaq: RIMM) continuing to plunge to multi-year lows, the stock is trading at an unthinkable 5x this year's internal EPS projections.
Even after lowering first-quarter guidance in April, RIM said it still expects to achieve full year diluted earnings per share of approximately $7.50. At a price per share of $36, that would put the P/E multiple at 4.8.
Of course with a backend loaded year, Wall Street doesn't trust the company's internal guidance and sees EPS of $6.35 instead. Even this level of earnings would give the company a multiple of 5.7x.
Research In Motion is clearly in an uphill battle to maintain market share and relevance in the smartphone space, but has the negativity gotten ahead of itself?
With its full year earnings estimates so aggressive, there is a big chance Research In Motion could warn about its outlook in the near future. However, since things have gotten so pessimistic, the warning may actually be an buying opportunity...
Even after lowering first-quarter guidance in April, RIM said it still expects to achieve full year diluted earnings per share of approximately $7.50. At a price per share of $36, that would put the P/E multiple at 4.8.
Of course with a backend loaded year, Wall Street doesn't trust the company's internal guidance and sees EPS of $6.35 instead. Even this level of earnings would give the company a multiple of 5.7x.
Research In Motion is clearly in an uphill battle to maintain market share and relevance in the smartphone space, but has the negativity gotten ahead of itself?
With its full year earnings estimates so aggressive, there is a big chance Research In Motion could warn about its outlook in the near future. However, since things have gotten so pessimistic, the warning may actually be an buying opportunity...
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