Collins Stewart Upgrades Digital River (DRIV) to Buy

November 4, 2009 8:47 AM EST

Collins Stewart upgrades Digital River (Nasdaq: DRIV) to Buy. Price target $8.50.

Collins analyst says, "Digital River, down 45% since announcing on Oct 12 its prelim Q3 results and that its biggest customer Symantec (Nasdaq: SYMC) will not renew its contract ending 6/30/10, reported yesterday a Beat & Lowered quarter. Though we would like to have more clarity on the timing/pace of business pull-back by SYMC and the efforts DRIV is undertaking to offset the revenue loss and changes in cost structure, the company's '10 revenue potential ex-SYMC is encouraging. As DRIV is trading at only 4x our '11 EV/EBITDA, we are upgrading the shares to Buy...In our view, DRIV should be valued on '11 estimates to capture the true proxy for LT earnings potential. Though the shares may be somewhat range bound in the near term (for lack of clarity), we see limited downside risk & material upside potential."

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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