Needham & Company Remains Sidelined on Synacor (SYNC) Following 4Q

Needham & Company reiterated a Hold rating on Synacor (NASDAQ: SYNC) following the company's 4Q earnings report. SYNC guided 1Q revenue of $26mm to $28mm, with a net loss of $6.2mm to $7.5mm.

Analyst Laura Martin commented, "SYNC reported 4Q16 revenue of $34.9mm, (up 8% y/y and 3% below our estimate), Adjusted EBITDA of $1.2mm (down 59% y/y, but well above our estimate of $0.4mm) and an EPS loss of $0.09 (better than our loss of $0.10 estimate). The good news for SYNC shareholders is that the bulk of the OpEx and CapX spending (nearly $10mm) required to on-board ATT is now behind SYNC. ATT should double SYNC’s mobile ad inventory available for sale, although we note that CPMs on mobile platforms are typically 1/3-1/2 of desktop CPMs. We expect the financial benefits from the ATT deal will begin in 3Q17 and extend for the next several years. SYNC continues to guide to $300mm of revenue in FY19. We retain our Hold rating, awaiting data about the ROI levels on SYNC’s ATT investment."

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

Shares of Synacor closed at $3.15 yesterday.

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