Piper Jaffray Upgrades Digital River (DRIV) to Overweight; Business is Accelerating

November 4, 2009 7:09 AM EST

Piper Jaffray upgrades Digital River, Inc. (Nasdaq: DRIV) to Overweight. Price target increased from $21 to $30.

Piper analyst says, "While 2010 will be a rebuilding year, we are upgrading shares of DRIV based on our belief that non-Symantec business is accelerating and PF operating margins will rebound in 4Q10, and return to near-Symantec levels of mid 20% in 2011...We realize we could be a quarter or two early on our upgrade, but we believe the risk/reward warrants an Overweight rating vs. previous Neutral rating. Clearly 2010 is a rebuilding year for the company, and we expect investors will quickly look past 2010 and into 2011, which we believe will see a dramatic improvement, with 2010 profroma operating margins of 4%, going to an estimated 23% in 2011, which is consistent with margins when Symantec was a customer...We are raising our estimates for 2011 to $1.50 from $0.85 based on raising our non-Symantec growth from 8% to 12%, which is still below company guidance of mid-teens growth in 2011, and based on margin expansion."

To see more analyst ratings on DRIV Click Here.

Digital River, Inc., together with its subsidiaries, provides outsourced e-commerce solutions in the United States, Europe, and the Asia Pacific.

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