Barrington Research Initiates Coverage on SciQuest (SQI), Strong Business Model and Supplier Base
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Price: $17.75 --0%
Rating Summary:
6 Buy, 4 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
6 Buy, 4 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barrington Research initiated coverage on shares of SciQuest Inc. (NYSE: SQI) today with an Outperform rating and $18.25 price target.
The company is connected with over 30 thousand suppliers as it does not charge for network transactions, unlike many of its competitors. The firm believes that this encourages customers to maximize usage and entail drives supplier adoption. They also note that Sciquest's payment is based on the organization’s size and number of modules.
Integrating into the public sector offers significant upside opportunity and acceptance by the Western States Contracting Alliance may lead to individual contracts with 12 other member states not including Colorado.
The firm is currently forecasting that revenue will continue to grow at a 17 plus percent rate year-over-year and that EBIT will continue to be around 21 percent with continued investments into the company's growth plan.
An analyst at Barrington comments, "SciQuest has tailored its solutions for specific industries, which is a significant differentiator as many of its competitors have generalized offerings... Its newer verticals are healthcare and the public sector. Still, SciQuest’s solutions make sense in other areas—20% of new business last quarter was from upselling acquired AECsoft customers, which are primarily in non-focus verticals."
For 2011, the firm estimates EPS of $0.27 with $54.4 million in revenues. For 2012, Barrington forecasts $0.36 in earnings with $63.9 million in revenue.
Shares of SQI are currently trading down $0.22 or 1.46 percent to $14.85 on the day.
The company is connected with over 30 thousand suppliers as it does not charge for network transactions, unlike many of its competitors. The firm believes that this encourages customers to maximize usage and entail drives supplier adoption. They also note that Sciquest's payment is based on the organization’s size and number of modules.
Integrating into the public sector offers significant upside opportunity and acceptance by the Western States Contracting Alliance may lead to individual contracts with 12 other member states not including Colorado.
The firm is currently forecasting that revenue will continue to grow at a 17 plus percent rate year-over-year and that EBIT will continue to be around 21 percent with continued investments into the company's growth plan.
An analyst at Barrington comments, "SciQuest has tailored its solutions for specific industries, which is a significant differentiator as many of its competitors have generalized offerings... Its newer verticals are healthcare and the public sector. Still, SciQuest’s solutions make sense in other areas—20% of new business last quarter was from upselling acquired AECsoft customers, which are primarily in non-focus verticals."
For 2011, the firm estimates EPS of $0.27 with $54.4 million in revenues. For 2012, Barrington forecasts $0.36 in earnings with $63.9 million in revenue.
Shares of SQI are currently trading down $0.22 or 1.46 percent to $14.85 on the day.
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