NP Writer. Just Google 'Tech Boom 2011' for a rapidly increasing number of articles.
LinkedIn trading at a trailing p/e of over 500!
Even with revenue of $243m, the revenue multiple (which is used often for tech stocks) is a very high 37.
Extrapolating this to TZ means that TZ would trade at $20m x 37 = $740m, or $6.17 per share - and probably even higher if our growth rate is expected to be higher.
On the LinkedIn figures, the market is expecting their revenue to multiply 'only' 20x over 5 years to $4b. I expect greater from TZ. See HERE
Of course the above analogy is very simplistic, and LinkedIn's price could retreat a fair bit (I won't be buying!) but it just highlights how much demand there is for a good story in a hot sector. Okay, LinkedIn is a social media company, and this sector is exciting due to Facebook, but as we saw 12 years ago, related sector companies also benefit very strongly.
It looks like LinkedIn has kicked things off in a big way, and I will most definitely be keeping an eye on the whole technology sector before making a buy or sell decision on TZ. I'd be crazy not to!
TZL Price at posting:
26.8¢ Sentiment: Buy Disclosure: Held
