Needham & Company Maintains a 'Buy' on Blue Coat Systems (BCSI); Lowering Target Following Weak Guidance
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Price: $25.82 --0%
Rating Summary:
0 Buy, 7 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
0 Buy, 7 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company maintains a 'Buy' on Blue Coat Systems (NASDAQ: BCSI), PT lowered from $33 to $30.
Needham analyst says, "The Blue Coat full results for F4Q11(Apr) following the negative preannouncement was within the previewed range; more importantly,
management outlook was sober and JulyQ guidance was well below consensus. Blue Coat’s $69.7m license figure is the lowest since July CY08. We believe deterioration in the core web-proxy business is due to competition and VAR issues and will take 3-4 quarters to fix, due to recent management changes at BCSI and business/product line reorganization. Blue Coat continues to be a viable M&A target, in our view, though the valuation for a challenged asset likely will go below current deal valuation (healthy assets recently bought in range of 5-10x revenue). The rationale for M&A, despite poor recent performance, is the attractiveness of BCSI’s high-end enterprise customer base for proxy & web filter, which would represent a “foothold” (we estimate 6,000 core customers) for strategic parties searching for an entry to network security."
For more ratings news on Blue Coat Systems click here and for the rating history of Blue Coat Systems click here.
Shares of Blue Coat Systems closed at $22.36 yesterday.
Needham analyst says, "The Blue Coat full results for F4Q11(Apr) following the negative preannouncement was within the previewed range; more importantly,
management outlook was sober and JulyQ guidance was well below consensus. Blue Coat’s $69.7m license figure is the lowest since July CY08. We believe deterioration in the core web-proxy business is due to competition and VAR issues and will take 3-4 quarters to fix, due to recent management changes at BCSI and business/product line reorganization. Blue Coat continues to be a viable M&A target, in our view, though the valuation for a challenged asset likely will go below current deal valuation (healthy assets recently bought in range of 5-10x revenue). The rationale for M&A, despite poor recent performance, is the attractiveness of BCSI’s high-end enterprise customer base for proxy & web filter, which would represent a “foothold” (we estimate 6,000 core customers) for strategic parties searching for an entry to network security."
For more ratings news on Blue Coat Systems click here and for the rating history of Blue Coat Systems click here.
Shares of Blue Coat Systems closed at $22.36 yesterday.
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