Needham & Company Upgrades Imperva (IMPV) to Buy Amid Potential Sale; $64 PT
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Needham & Company upgraded Imperva (NYSE: IMPV) from Hold to Buy with a price target of $64.00, as Qatalyst hired for a potential sale.
Analyst Scott Zeller commented, "Our IMPV downgrade post MarQ was based on our lack of confidence that IMPV could achieve its forecast for the year. IMPV missed in JuneQ and shares have since recovered from a low near $35, up to the current $45 range. Last night’s call with full details of the JuneQ miss lowered the bar materially, with CY16 guidance going down -18% from $305.5m to $249.6m at the midpoint. We believe the bar has now been lowered sufficiently for IMPV for CY16. The official news on the call of Qatalyst being hired confirms recent speculation, and we believe activist Elliott will likely be rewarded with a sale of IMPV. Valuation? Currently, shares are at 4x EV/CY17 on a very low bar of $318m in CY17. We estimate IMPV would be worth 6x EV/CY17 revenues or greater in a potential sale. Upgrade to BUY, new target $64, based on 6x EV/CY17 revenue."
Shares of Imperva closed at $45.01 yesterday.
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