Jefferies Cuts PT on Broadsoft (BSFT) to $32 Amid Q2 Beat; Would Like More LTE Color
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Price: $28.31 +0.43%
Rating Summary:
5 Buy, 8 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Rating Summary:
5 Buy, 8 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
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Jefferies lowered its price target on Broadsoft (Nasdaq: BSFT) about 34 percent, from $48.50 to $32.00, following second-quarter earnings results. Jefferies is keeping its Buy rating on Broadsoft.
Yesterday, Broadsoft reported second-quarter earnings of 29 cents per share on revs of $32.2 million, besting views calling for earnings of 12 cents and revenue of $28.77. Guidance was also notable, both third-quarter and fiscal 2011 estimates coming in above views.
Jefferies notes, "Deferred revenue was down 6% Q/Q from $57.8 million to $54.4 million. The decline in Deferred isn’t concerning in our view – it tracks the normal seasonality in the business." The firm believes there is significant potential for better-than-expected operating margins longer term. Second-quarter operating margins were 24.2 percent, and Jefferies expects Broadsoft to hit margins of 30 percent or better on a "constant basis."
On LTE, Jefferies comments, "The company provided limited incremental color on its longerterm LTE opportunity, saying that they are currently engaged in lab and trial activity for Voice-over-LTE (VoLTE) services at operators all over the world."
The firm is adjusting some numbers for Broadsoft. Jefferies increased its fiscal 2011 sales expectations from $125.4 million to $129.5 million, and fiscal 2012 from $153.5 to $157.1 million. Third-quarter EPS moves from 16 to 21 cents, FY11 EPS is increased from 75 to 95 cents, and FY12 moves from 95 cents to $1.10.
For more analyst color, click here. For a ratings history on Broadsoft, click here.
Broadsoft shares are up 7 percent on today's trading session.
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Yesterday, Broadsoft reported second-quarter earnings of 29 cents per share on revs of $32.2 million, besting views calling for earnings of 12 cents and revenue of $28.77. Guidance was also notable, both third-quarter and fiscal 2011 estimates coming in above views.
Jefferies notes, "Deferred revenue was down 6% Q/Q from $57.8 million to $54.4 million. The decline in Deferred isn’t concerning in our view – it tracks the normal seasonality in the business." The firm believes there is significant potential for better-than-expected operating margins longer term. Second-quarter operating margins were 24.2 percent, and Jefferies expects Broadsoft to hit margins of 30 percent or better on a "constant basis."
On LTE, Jefferies comments, "The company provided limited incremental color on its longerterm LTE opportunity, saying that they are currently engaged in lab and trial activity for Voice-over-LTE (VoLTE) services at operators all over the world."
The firm is adjusting some numbers for Broadsoft. Jefferies increased its fiscal 2011 sales expectations from $125.4 million to $129.5 million, and fiscal 2012 from $153.5 to $157.1 million. Third-quarter EPS moves from 16 to 21 cents, FY11 EPS is increased from 75 to 95 cents, and FY12 moves from 95 cents to $1.10.
For more analyst color, click here. For a ratings history on Broadsoft, click here.
Broadsoft shares are up 7 percent on today's trading session.
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*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
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