TD Newcrest Downgrades EXFO Inc. (EXFO) to Hold; Q4 in Line; Q1 Guidance Misses and FY12 Targets Look Heady
Tweet Send to a FriendGet Alerts EXFO Hot Sheet
Price: $4.45 +0.45%
Rating Summary:
2 Buy, 3 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Rating Summary:
2 Buy, 3 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Trade EXFO Now!
TD Newcrest downgraded EXFO Inc. (NASDAQ: EXFO) from Buy to Hold, price target cut from $10 to $7.
TD analyst says, "Q1 revenue guidance of $65-$70mm missed expectations (consensus $72.0mm) as did earnings guidance. We now see revenue flattish y/y for both Q1 and Q2 (against tough comparables), not ideal for a high-growth name. A linchpin of our investment thesis remains that EXFO is well-positioned to capitalize on growth opportunities, notably in the wireless space as LTE service is rolled out. We see a higher software revenue component boosting gross margin, but this did not play out in Q4 despite a large ($1mm+) service assurance deal. We now model 10% revenue growth in F2012 (consensus 13%), which is a far cry from the target implied in EXFO’s three-year plan of 23-24%. Valuation is arguably attractive at 8x LTM EBITDA, but this is in line with key peers Agilent (NYSE: A) and JDS Uniphase (Nasdaq: JDSU)."
For more ratings news on EXFO Inc. click here and for the rating history of EXFO Inc. click here.
Shares of EXFO Inc. closed at $6.01 yesterday, with a 52 week range of $5.47-$13.19.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
TD analyst says, "Q1 revenue guidance of $65-$70mm missed expectations (consensus $72.0mm) as did earnings guidance. We now see revenue flattish y/y for both Q1 and Q2 (against tough comparables), not ideal for a high-growth name. A linchpin of our investment thesis remains that EXFO is well-positioned to capitalize on growth opportunities, notably in the wireless space as LTE service is rolled out. We see a higher software revenue component boosting gross margin, but this did not play out in Q4 despite a large ($1mm+) service assurance deal. We now model 10% revenue growth in F2012 (consensus 13%), which is a far cry from the target implied in EXFO’s three-year plan of 23-24%. Valuation is arguably attractive at 8x LTM EBITDA, but this is in line with key peers Agilent (NYSE: A) and JDS Uniphase (Nasdaq: JDSU)."
For more ratings news on EXFO Inc. click here and for the rating history of EXFO Inc. click here.
Shares of EXFO Inc. closed at $6.01 yesterday, with a 52 week range of $5.47-$13.19.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- UPDATE: MKM Partners Downgrades Alkermes (ALKS) to Sell
- JPMorgan Downgrades Devon Energy (DVN) to Neutral
- Deutsche Bank Upgrades Seagate (STX) to Buy; Sanmina (SANM) Cut to Sell, Flextronics (FLEX) & Fabrinet (FN) Cut to Hold
Create E-mail Alert Related Categories
DowngradesRelated Entities
TD Newcrest, Earnings
Login with Facebook
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
