Summit Research Starts Vonage (VG) at Hold

Summit Research earlier initiated coverage on Vonage (NYSE: VG) with a Hold rating and a price target of $6.00. Analyst Jonathan Kees doesn't see attractive risk/reward.

"While we like the company's market position in the fragmented and high growth business sector, its business segment sales growth, its head start with larger customers, its network technology, and its cash generation (several peers are still burning cash), we find the stock's risk to reward not as attractive," said the analyst.

Kees added, " The company's acquisition strategy has limited synergies upside, and the accelerated decline of its large consumer segment, its net debt position, and the upcoming debt due with only modest FCF generation, combined with a somewhat rich valuation keeps us cautious. Management indeed has done a strong job in executing which we expect should continue, but we take a wait-and-see approach with continued integrations of current and new acquisitions and b/s management in the new year."

For an analyst ratings summary and ratings history on Vonage click here. For more ratings news on Vonage click here.

Shares of Vonage closed at $5.14 yesterday.

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