Bottomline Technologies (EPAY) Numbers Trimmed at Needham & Company Post Q4

August 21, 2013 9:49 AM EDT Send to a Friend
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Price: $25.28 +3.65%

Rating Summary:
    3 Buy, 6 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 9 | Down: 9 | New: 33
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Needham & Company analyst Mayank Tandon trimmed his price target on Bottomline Technologies (NASDAQ: EPAY) from $35 to $30 but maintained a Buy rating following "good" Q4 results but lower-than-expected FY14 guidance.

Tandon comments, "While EPAY delivered solid 4Q FY13 results, management provided initial FY14 EPS guidance below expectations on account of dilution from two acquisitions and higher tax expenses. Specifically, management announced the acquisitions of Swiss-based Sterci and U.K.-based Simplex, both of which expand EPAY's SWIFT platform and should lead to strong cross and up selling opportunities long term. Although the two acquisitions are expected to add $25 million in revenue over FY14, they are expected to be dilutive to operating income over 1H FY14 by $4-5 million. We are lowering our EPS estimate to $1.05 from $1.32 to reflect the dilution and higher tax expenses. While the lower guidance is expected to hit the stock, we encourage long term investors to use the weakness to BUY. We believe the initial guidance could turn out to be conservative as has historically been the case with EPAY and the initial success with its Paymode bank channel partners (10 deals signed in 4Q, including 7 from the bank channel, well ahead of the 2-3 goal) could drive estimate upgrades over FY14."

The firm trimmed FY 2014 EPS from $1.32 to $1.105 and FY 2015 EPS was set at $1.23.

For an analyst ratings summary and ratings history on Bottomline Technologies click here. For more ratings news on Bottomline Technologies click here.

Shares of Bottomline Technologies closed at $29.79 yesterday.


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