Bear Stearns Upgrades XM Satelliteposted by MR WAVETHEORY at 8/23/2006 06:15:00 PM
"Our 2007 target price of $17 is based on our discounted cash-flow valuation and supported by discounted earnings per share and free cash flow/share analyses, as well as a Sirius enterprise value/subscriber comparative basis, all of which yield valuations in the $17-to-$18 range."
Correct me if I am wrong, but XM has never made an operating profit. So, how did Bear Stearns come up with a free cash flow model that ends up with a positive valuation for XM? I wonder how many years out Bear Stearns had to stretch that DCF model to make things look green.
Related Link: XM Satellite Radio Catching Better Waves