Needham & Company Reiterates a 'Buy' on Virtusa (VRTU) After Hosting Ranjan Kalia, VRTU's CFO

June 15, 2012 9:33 AM EDT Send to a Friend
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Price: $36.32 --0%

Rating Summary:
    7 Buy, 0 Hold, 0 Sell

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    Up: 1 | Down: 0 | New: 2
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Needham & Company reiterates a 'Buy' on Virtusa (NASDAQ: VRTU) price target of $19.00.

Analyst, Mayank Tandon, said, "We hosted Ranjan Kalia, VRTU's CFO, for a day of investor meetings in the Mid-Atlantic region. Management’s commentary around demand and margins remains consistent with its guidance provided back in May. We believe the BFSI vertical (banking, financial services, and insurance – 57% of revenue) is tracking on plan with the banking segment starting to see the pipeline convert to revenue following the slow start to the year. Management called out healthcare (15% of revenue) as an area of strength, consistent with comments out of its peers, as the segment benefits from the regulatory changes on the payor side. Besides its focus on sustaining growth ahead of industry pace, management remains committed to driving sustained margin expansion, primarily through G&A leverage. Net-net we remain comfortable with our estimates on VRTU despite the choppy demand climate and are reiterating our rating." (Needham slightly lowers FY13 EPS estimate from $1.15 to $1.03)

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

Shares of Virtusa closed at $14.55 yesterday.


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