Imperial Capital Lowered Price Target Following KEYW Holding's (KEYW) 1Q Results

Imperial Capital maintains an In-Line rating on The KEYW Holding Corporation (NASDAQ: KEYW), and lowered the price target to $7.50 (from $8.50), following 1Q15 results. KEYW reported revenue of $71.6mn and adjusted EBITDA of $0.1mn, below estimates of $77.6mn and $2.0mn, respectively.

Analyst Michael Kim commented on KEYW, saying, "We are maintaining our In-Line rating on KEYW shares and reducing our one-year price target to $7.50 from $8.50 based on sum-of-the-parts valuation and our decreased estimates. Our price target implies about 2% upside from recent levels. We anticipate slower growth for the commercial cybersecurity business (“Hexis”), primarily due to weakness in license sales of the company’s HawkEye AP product and greater shift of the new HawkEye G product toward the second half of FY15. We await improved bookings from conversions of pilots into deployments by enterprise customers. We continue to estimate Hexis revenue will be back-end weighted in FY15, and growth could be restrained by longer than expected sales cycles and/or smaller initial transactions, given the company’s limited number of reference customers."

Kim also added, "Management lowered its guidance for the Hexis business due to weakness in legacy product sales and estimates total revenue of $20-25mn, down from previous guidance of $25-30mn. Management remains optimistic about broader adoption of HawkEye G."

For an analyst ratings summary and ratings history on The KEYW Holding Corporation click here. For more ratings news on The KEYW Holding Corporation click here.

Shares of The KEYW Holding Corporation closed at $7.27 yesterday.

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