Canaccord Adams Initiates Covreage on Netezza (NZ) with a Buy

June 16, 2009 10:57 AM EDT

Canaccord Adams initiates covreage on Netezza (NYSE: NZ) with a Buy. Price target $9.50.

Canaccord analyst says, "Investor pessimism is at healthy levels. Netezza has been facing several nearer-term headwinds, including being a “big ticket” vendor in the current macro-economic backdrop, risk of additional deferral in front of a refresh later this year, and increased competition. We view each of these as well known, with many investors admittedly waiting on the sidelines. Fundamentals appear to have bottomed. Following a particularly challenging April quarter in terms of close rates, there are some indications that rates have begun to improve. Although not yet approaching historical consistency levels, we believe this represents an early fundamental inflection that may likely pull investors “off the fence.” C2010 story is compelling. Armed with easy comparables, a tightened expense structure and a high-end product refresh, we look upon C2010 as a year of material EPS acceleration. Our initial forecast calls for non-GAAP EPS of $0.37 in F2011 and $0.47 in F2012. A F2009-11E PEG of 0.5x our $0.37 EPS estimate yields our $9.50 price target."

To see more analyst ratings on NZ Click Here.

Netezza Corporation (Netezza) is a provider of data warehouse appliances.

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