Chardan Capital Markets Defends Perion Network (PERI) on Babylon's Woes

October 30, 2013 9:54 AM EDT
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Price: $1.57 +0.64%

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    3 Buy, 2 Hold, 0 Sell

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    Up: 30 | Down: 30 | New: 23
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Chardan Capital Markets is out defending Perion Network Ltd. (NASDAQ: PERI) on weakness related to news Israeli translation software provider Babylon revealed that Google (NASDAQ: GOOG) is not renewing a cooperation agreement between the two companies. The firm said Babylon's woes poses no risk to PERI.

"In PERI's upcoming earnings call on Nov 12, we expect the company to reiterate its long term contractual relationship with its partners," analyst Jay Srivatsa states. " Perion customers has signed long term contracts with both Google and Yahoo. Earlier this year, Perion inked a two year contract with Google through May 2015. Likewise, Conduit, which PERI acquired in September 2013 also has two year contract with Google in place. In addition, Conduit also has a four year contract with Yahoo that was signed earlier this year. This suggests to us that Perion is at no risk to be put in a situation similar to Babylon."

He added, "We believe the actions taken by Google with Babylon is indicative of companies with business models that are flawed and simply do not conduct enough testing before releasing their products. With these search companies transitioning their search engines to the mobile platform, we expect further scrutiny and policy changes to ensure that their partners have robust software that is optimized to the platforms. It is our view that Perion takes a judicious and through approach and conducts a slew of testing and optimization practices with its search engines partners and does not participate in questionable practices that has plagued companies like Babylon."

The firm maintained a Buy rating and price target of $17.00.

For an analyst ratings summary and ratings history on Perion Network Ltd. click here. For more ratings news on Perion Network Ltd. click here.

Shares of Perion Network Ltd. are down 11.9% early.

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