On 2-21, Take Stock showed a 20.0% forecast EPS growth rate for EXBD, but two months later, on 4-17, it showed a much reduced EPS forecast of 6.0%. As best as I can determine, no historical EPS was revised and all that happened was the addition of data for the fourth quarter 2006 and, as a result, annual data for 2006.
In the past three years, EPS growth has slowed substantially. EPS grew 58.1% in 2004, fell to 24.5% in 2005, and to 6.0% last year. In the Dec quarter, EPS grew 9.6%.
I don’t understand how Take Stock can reduce its EPS forecast for the next five years from 20.0% to 6.0% with the addition of the Dec quarter and annual data for 2006. After all, the slowing EPS growth is no sudden surprise. And, when it fell from 58.1% to 24.5% in 2005, Take Stock still forecast 20% EPS growth.
Could Sally An, or someone else who knows, explain the formula that Take Stock uses to arrive at a forecast EPS rate….hopefully, in easy-to-understand terms, with minimal quant lingo and maximum explanations?
We shouldn't have to be quant people [I'm not] to understand the explanation [this is not rocket science]. An example or two would help, say the 20.0% and 6.0% for EXBD.
Armin Fields
Sally An wrote growth rate is calculated from past 10 years data ( from hemscott) on the most conservative base. (if you need more information on this I can explain further for you, but this require some level of quant understanding so I just omit it here).>>