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Needham & Company Reiterates a 'Buy' on Sourcefire (FIRE); Much of the News Appears Priced-In

March 16, 2011 7:31 AM EDT Send to a Friend
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Price: $75.96 --0%

Rating Summary:
    4 Buy, 16 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 25 | Down: 18 | New: 23
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Needham & Company reiterates a 'Buy' on Sourcefire (NASDAQ: FIRE), PT $32.

Needham analyst says, "We are highlighting Sourcefire as an attractive idea in our Infrastructure Software and Security Software coverage, following FIRE’s recent late-February earnings call. It is our view that FIRE is a compelling risk vs. reward story for the “high-valuation” group we cover in networking software, datacenter, and security. Specifically, we believe investors are interested in ideas which are in the attractive “neighborhood” of data center/networking/security software, but may not want to originate new positions at the current valuations, some of which are 6-9x EV/revenue. Sourcefire, partly due to a few communication challenges in the last 12 months, continues to trade below its peers and is at roughly 3.0x EV/CY12 revenue. We view the recent missteps at the company, as well as the lingering questions regarding federal exposure and competition, as “openings” for building a position in a franchise which, we believe, has already priced-in questions on FIRE positioning. Our highlights below on FIRE include: M&A attractiveness, a recently lowered bar on EPS growth as well as federal exposure, and misdirected concerns about competition."

For more ratings news on Sourcefire click here and for the rating history of Sourcefire click here.

Shares of Sourcefire closed at $25.75 yesterday.




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