UPDATE: Northland Capital Markets Upgrades Support.com (SPRT) to Outperform

(Updated - January 27, 2015 8:36 AM EST)

Northland Capital Markets upgraded Support.com (NASDAQ: SPRT) from Market Perform to Outperform with a price target of $3. Analyst Michael Latimore views valuation as compelling.

"SPRT's valuation is compelling, in our view, at only 0.29x revs ($75.3 mil cash) and 1x book. We believe the Comcast contract auto-renewed in Dec. We also like the measured strategy the new CEO is taking toward building the SaaS segment and expect the company to operate at about cash flow breakeven. Raising rating from Market Perform to Outperform; reiterating $3 target based on 1x revs," said Latimore.

"Comcast remains the majority of revenue. The Comcast contract expired in Dec.; however, there is an auto-renew clause in the contract. As there has been no news regarding Comcast, we assume the contract autorenewed. We believe incremental opportunities will emerge within Comcast over time, such as providing support for home automation and security systems, which can hang off the WiFi network. Comcast is in the process of acquiring Time Warner Cable. Time Warner would increase Comcast's Internet subscriber base by 50%. We would not be surprised to see Comcast impose its customer service policies, such as use of Support.com, on Time Warner post acquisition. Recent Comcast comments indicate customer experience is a top 2015 priority," he added.

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

Shares of Support.com closed at $1.90 yesterday.

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