FBR Capital maintains an 'Outperform' on tw telecom (TWTC); First Glance - 1Q11 Results Ahead of Consensus
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Price: $42.78 --0%
Rating Summary:
3 Buy, 11 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
3 Buy, 11 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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FBR Capital maintains an 'Outperform' on tw telecom (NASDAQ: TWTC)
FBR analyst says, "On May 10, after market close, TWTC reported 1Q11 results. Revenue, EBITDA and FCF were all ahead of expectations. Across the industry, we see improvement in sales activity reflecting stabilizing macro demand trends, but TWTC's rate of return on incremental invested capital appears to be declining. Revenue of $332.5 million was up 6.9% year over year (up 2.4% on a sequential quarter basis) and above consensus expectations of $329.3 million and FBR's forecast of $329.7million. Adjusted EBITDA of $121.4 million was up 6.3% year over year and was above Street and FBR expectations, at $116.9M and $119.2M respectively. Capex of $79.3M was inline with both our estimate of $79.1M and inline with the street consensus of $79.8. As a result, FCF slightly beat our expectations at $26.1M (versus FBR at $25.1M). Enterprise stability, accelerated revenue growth and cash flow scalability of the company's business model represent positive catalysts for the shares. We believe TWTC is likely to benefit from improved penetration in the medium-sized enterprise market; but believe that this is already more than discounted in the shares, particularly when compared to PAET (and CBEY) from a FCF yield perspective. We elect to remain on the sidelines based on relative valuation."
For more ratings news on tw telecom click here and for the rating history of tw telecom click here.
Shares of tw telecom closed at $22.05 yesterday.
FBR analyst says, "On May 10, after market close, TWTC reported 1Q11 results. Revenue, EBITDA and FCF were all ahead of expectations. Across the industry, we see improvement in sales activity reflecting stabilizing macro demand trends, but TWTC's rate of return on incremental invested capital appears to be declining. Revenue of $332.5 million was up 6.9% year over year (up 2.4% on a sequential quarter basis) and above consensus expectations of $329.3 million and FBR's forecast of $329.7million. Adjusted EBITDA of $121.4 million was up 6.3% year over year and was above Street and FBR expectations, at $116.9M and $119.2M respectively. Capex of $79.3M was inline with both our estimate of $79.1M and inline with the street consensus of $79.8. As a result, FCF slightly beat our expectations at $26.1M (versus FBR at $25.1M). Enterprise stability, accelerated revenue growth and cash flow scalability of the company's business model represent positive catalysts for the shares. We believe TWTC is likely to benefit from improved penetration in the medium-sized enterprise market; but believe that this is already more than discounted in the shares, particularly when compared to PAET (and CBEY) from a FCF yield perspective. We elect to remain on the sidelines based on relative valuation."
For more ratings news on tw telecom click here and for the rating history of tw telecom click here.
Shares of tw telecom closed at $22.05 yesterday.
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