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Needham & Company Reiterated Buy on Virtusa (VRTU) Following Investor Meetings

August 17, 2015 8:16 AM EDT
Get Alerts VRTU Hot Sheet
Price: $51.33 --0%

Rating Summary:
    6 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Needham & Company reiterated a Buy rating and $55.00 price target on Virtusa (NASDAQ: VRTU) following investor meetings with CFO Ranjan Kalia. Analyst Mayank Tandon believes VRTU can continue to outpace industry revenue growth rates while driving sustained margin expansion. Demand continues to be strong, with particular traction on transformation deals in the Financial Services & Insurance verticals. Recent acquisitions Agora and Apparatus are still on track to add roughly 8% of growth in FY16, and should be accretive by the end of the year.

Tandon commented, "On Thursday, we hosted Virtusa’s CFO Ranjan Kalia on the road for investor meetings. Our positive thesis remains intact: we believe VRTU can continue to outpace industry revenue growth rates while driving sustained margin expansion. The demand pipeline continues to look healthy, with the company leveraged to key cyclical and secular drivers (regulatory and compliance, and emerging technologies such as Cloud/Mobile/Analytics). Management remains focused on execution on their large transformation deals while expanding margins and considering strategic tuck-in acquisitions. We believe shares are undervalued at current levels (16x ex-cash our FY17E EPS) for our long-term projected EPS growth of 20-25%. We reiterate our BUY and $55 target."

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

Shares of Virtusa closed at $50.26 yesterday.



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