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KeyBanc Starts Advisory Board Company (ABCO) at Buy

September 30, 2013 4:32 PM EDT Send to a Friend
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Price: $51.73 -0.02%

Rating Summary:
    8 Buy, 5 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 17 | Down: 38 | New: 6
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KeyBanc initiates coverage on Advisory Board Company (NASDAQ: ABCO) with a Buy rating and a price target of $72.00.

"We project top-line revenue growth of 18% in 2014 (above consensus of 16%) powered by the addition of 22 sales teams (+14% year-over-year) and the launch of four new software products, potentially representing as much as ~$350,000 of revenue per member," said analyst Donald Hooker.

"Management has accelerated the growth of its sales force over the past year (+14% LTM vs +12% in prior two years), which we think is bullish given the Company's relationship driven selling model. We model each sales team generating $3 million of NTM revenue (+5% year-over-year), which should prove to be a reasonable outlook given: 1) the trend of revenue growth per sales team (~8% CAGR over the past five years); 2) the improving mix of higher-priced software offerings; and 3) the recently completed sales force re-organization that should facilitate improved cross-selling," he added.

For an analyst ratings summary and ratings history on Advisory Board Company click here. For more ratings news on Advisory Board Company click here.

Shares of Advisory Board Company closed at $58.95 yesterday.




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