Goldman Raises Price Target on Broadsoft (BSFT) in Wake of Earnings Beat

August 7, 2012 7:58 AM EDT
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Price: $43.10 -1.15%

Rating Summary:
    8 Buy, 8 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 35 | Down: 31 | New: 11
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On Monday, Broadsoft (NASDAQ: BSFT) reported better than expected earnings, with a top and bottom-line beat for the second quarter. Broadsoft also raised guidance. In the wake of the positive results, analysts at Goldman Sachs Equity Research raised their price target on Broadsoft to $35 (from $31.00).

"The company saw strength in the hosted Unified Communications (UC) business (c.60% of sales), which we believe will continue to be a source of upside as adoption is inflecting positively and penetration is still low in the single digits," said analyst Simona Jankowski.

"In addition, new customer activity increased, with new customers driving 9% of sales, up from 5% in 1Q. Hosted UC adoption was particularly strong in EMEA, which grew 70% qoq and 99% yoy, bucking the macro headwinds and reflecting the secular tailwinds for the business," added Jankowski.

One of Broadsoft's carrier customers won a 60,000 seat enterprise deal using BroadSoft’s hosted UC solution, demonstrating that BroadSoft can compete and win in Cisco’s home turf and not just in the SMB segment, thinks Jankowski.

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

Shares of Broadsoft closed at $27.90 yesterday.

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