KeyBanc Upgrades EPIQ Systems (EPIQ) to Buy; Bankruptcy Business Growing Faster

May 20, 2009 7:28 AM EDT

KeyBanc upgrades EPIQ Systems, Inc. (Nasdaq: EPIQ) from Hold to Buy. Price target $17.

KeyBanc analyst says, "We are upgrading shares of EPIQ Systems to BUY based on recent data suggesting that momentum in EPIQ's bankruptcy segment could create meaningful revenue and EPS upside in the 2Q and 2009. Last week, we noted that EPIQ won the Chrysler bankruptcy engagement. Moreover, data from U.S. courts indicates bankruptcy filings increased more than 60% year-over-year in the 4Q (December); we expect March quarter data to be available by the end of May. At an investor conference earlier today, CEO Tom Olofson commented that EPIQ has seen its Chapter 11 business "more than double" year-to-date, accelerating every month so far in 2009 up to 149% year-over-year growth in April."

"We are comfortable increasing our 2009 revenue estimate by $6 million based on bankruptcy segment growth of 35% (up from our prior estimate of 26%); we have increased our 2009 EPS estimate from $0.69 to $0.73 to reflect higher bankruptcy revenues. We are also increasing our 2010 EPS estimate from $0.84 to $0.88."

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• Chrysler LLC
• KeyBanc
• Bankruptcy

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