Rally Software (RALY) Estimates, PT Lower at Needham & Company Post Q3

December 6, 2013 7:34 AM EST Send to a Friend
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Price: $10.81 +3.25%

Rating Summary:
    4 Buy, 3 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 14 | Down: 28 | New: 51
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Needham & Company analyst Michael Huang cut estimates and it price target on Rally Software Development (NYSE: RALY) from $37 to $32 following an "unimpressive" Q3 but reiterated his Buy rating.

"Despite the upside F15 guide, shares could be weaker due to the unimpressive net-add performance which likely drives some overstated investor concerns," Huang notes. "We'd attribute the "softer" bookings to Q3 seasonality and to temporary disruption from the new head of sales and not to any meaningful deterioration of trends. We'd be buyers on weakness, especially given the magnitude of the opportunity and competitive leadership which should support premium growth rates through the intermediate term. We're optimistic that 4Q is shaping up to be impressive, due to favorable seasonality and strong pipeline, which could restore confidence in the direction of trends.

For F15, the firm is revising revenue estimate to $91.4 million (from $90.3 million) and revising our EPS estimate to a loss of $0.87 (from -$0.73) to reflect more aggressive S&M investment.

For an analyst ratings summary and ratings history on Rally Software Development click here. For more ratings news on Rally Software Development click here.

Shares of Rally Software Development closed at $25.46 yesterday.


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