Benchmark Cuts Price Target on Progress Software (PRGS), EBS Segment Underperforms
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Price: $44.36 +2.66%
Rating Summary:
9 Buy, 5 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
9 Buy, 5 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Benchmark is reaffirming its Buy rating on shares of Progress Software (NASDAQ: PRGS) while lowering its price target from $31 to $25.
The company pre-announced its third quarter results with revenue expectations of $133-$136 million and non-GAAP EPS of $0.27 to $0.29, below the firms $135 million and $0.36 estimates.
The quarter miss is due to poor performance in the company's Enterprise Business Solutions (EBS) segment as its Enterprise Data Solutions and Application Development Platforms segments both performed above expectations.
The company is making changes to its regional management positions to help with the development of its Enterprise Business Solutions segment. The firm believes that the problem around the company will linger for at least another two quarters or so.
For 2011, the firm is reducing its revenue estimate by $14 million to 542 million and its EPS estimate by $0.13 to $1.50. For 2012, Benchmark's estimates go to $586 million and $1.63 from $601 million and $1.82.
An analyst at Benchmark comments, "Despite the likelihood that the stock may grind sideways in the near-term, we continue to believe the Company’s $18.52 share price provides some downside protection with an enterprise value to revenue multiple of 1.6x and with $5.52 per share in cash while management sorts through its execution issues."
For more ratings news on Progress Software click here and for the rating history of Progress Software click here.
Shares of Progress Software closed at $18.52 yesterday.
The company pre-announced its third quarter results with revenue expectations of $133-$136 million and non-GAAP EPS of $0.27 to $0.29, below the firms $135 million and $0.36 estimates.
The quarter miss is due to poor performance in the company's Enterprise Business Solutions (EBS) segment as its Enterprise Data Solutions and Application Development Platforms segments both performed above expectations.
The company is making changes to its regional management positions to help with the development of its Enterprise Business Solutions segment. The firm believes that the problem around the company will linger for at least another two quarters or so.
For 2011, the firm is reducing its revenue estimate by $14 million to 542 million and its EPS estimate by $0.13 to $1.50. For 2012, Benchmark's estimates go to $586 million and $1.63 from $601 million and $1.82.
An analyst at Benchmark comments, "Despite the likelihood that the stock may grind sideways in the near-term, we continue to believe the Company’s $18.52 share price provides some downside protection with an enterprise value to revenue multiple of 1.6x and with $5.52 per share in cash while management sorts through its execution issues."
For more ratings news on Progress Software click here and for the rating history of Progress Software click here.
Shares of Progress Software closed at $18.52 yesterday.
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