Needham & Company Reiterates a 'Hold' on Hot Topic (HOTT); Waiting for Product Improvements to Unfold for BTS

Needham & Company reiterates a 'Hold' on Hot Topic (NASDAQ: HOTT).

Needham analyst says, "At ~32.7x our FY12 EPS estimate of $0.24 (or 24.9x excluding $1.72 in cash), HOTT is trading at a significant premium to the sector average of ~15x. For a unique retail concept with the opportunity to improve OMs materially from trough levels (currently -0.1% vs. peak of 13.4%), resulting in ~15% to 18% organic growth, we think HOTT is fairly valued at this time, until signs of accelerating sales trends materialize."

"We are increasing our F2Q, F3Q, and FY11 EPS, before extraordinary items, to $(0.10), $0.08, and $0.17, respectively, from $(0.12), $0.07, and $0.14, respectively...We are adjusting our F2Q, F4Q, and FY12 EPS estimates, before extraordinary items, to $(0.10), $0.24, and $0.24, respectively, from $(0.12), $0.25, and $0.23, respectively."

For more ratings news on Hot Topic click here and for the rating history of Hot Topic click here.

Shares of Hot Topic closed at $7.66 yesterday.

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