Needham & Company Maintains a 'Buy' on Bottomline Technologies (EPAY); Acquisition Dilution Dragged Down Guidance
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Price: $26.20 --0%
Rating Summary:
5 Buy, 4 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 4 | Down: 8 | New: 7
Rating Summary:
5 Buy, 4 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 4 | Down: 8 | New: 7
Trade EPAY Now!
Needham & Company maintains a 'Buy' on Bottomline Technologies (NASDAQ: EPAY) price target lowered from $33 to $25.
Analyst, Mayank Tandon, said, "EPAY delivered in-line 3Q results but guidance for 4Q, FY12 and FY13 came in well below expectations because of the dilution from the recent acquisition of Intuit's (Nasdaq: INTU)(N/R) cash management business. Management announced the acquisition in early March and had noted that the deal would be dilutive since it was a turnaround and would require incremental investment. However, the incremental investment is going to be larger than anticipated and coupled with a more concerted focus to move the revenue model to a subscription model, there will be a significant drag on EPS over the next 12-18 months. (Longer term though we like the deal since it opens up a new market opportunity for EPAY, specifically the small to medium sized bank market, and the increase in subscription revenue should only help to increase visibility in the model.)"
FY12 EPS estimate lowered from $0.99 to $0.95 and FY13 from $1.18 to $0.90.
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 $19.03 yesterday, with a 52 week range of $17.05-$29.90.
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Analyst, Mayank Tandon, said, "EPAY delivered in-line 3Q results but guidance for 4Q, FY12 and FY13 came in well below expectations because of the dilution from the recent acquisition of Intuit's (Nasdaq: INTU)(N/R) cash management business. Management announced the acquisition in early March and had noted that the deal would be dilutive since it was a turnaround and would require incremental investment. However, the incremental investment is going to be larger than anticipated and coupled with a more concerted focus to move the revenue model to a subscription model, there will be a significant drag on EPS over the next 12-18 months. (Longer term though we like the deal since it opens up a new market opportunity for EPAY, specifically the small to medium sized bank market, and the increase in subscription revenue should only help to increase visibility in the model.)"
FY12 EPS estimate lowered from $0.99 to $0.95 and FY13 from $1.18 to $0.90.
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 $19.03 yesterday, with a 52 week range of $17.05-$29.90.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
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