DA Davidson Cuts Price Target on Cbeyond (CBEY), Looks to Cloud Products for Sales Growth
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Price: $9.99 --0%
Rating Summary:
1 Buy, 9 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
1 Buy, 9 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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DA Davidson is maintaining its Neutral rating on shares of Cbeyond (NASDAQ: CBEY) while lowering its price target from $10 to $8.25.
The company has converted roughly 12 percent of its customers to a Ethernet over Copper solution from Actelis Networks with plans to convert roughly 25 percent by mid-2012. CBEY's costs have risen consistently over the past three quarters and looks to increase again in the third quarter. The firm believes the the cost increases will be offset by converting its customers to Ethernet over Copper.
An analyst at DA Davidson comments, "We expect CBEY to continue to try to focus on training its sales force to sell cloud services to new and existing customers. With the current economic climate, small businesses are much more conservative on business costs and many have found significant savings by outsourcing IT services to the cloud."
Cloud product revenues rose by 12.5 percent between the first and second quarter and the firm anticipates similar growth between the second and third quarter with a slight ramp up between the third and fourth quarter.
For 2011 and 2012, the firm estimates EPS of ($0.08) and $0.20 with $486.8 million and $529.6 million in revenue for the two years.
For more ratings news on Cbeyond click here and for the rating history of Cbeyond click here.
Shares of Cbeyond closed at $7.53 yesterday.
The company has converted roughly 12 percent of its customers to a Ethernet over Copper solution from Actelis Networks with plans to convert roughly 25 percent by mid-2012. CBEY's costs have risen consistently over the past three quarters and looks to increase again in the third quarter. The firm believes the the cost increases will be offset by converting its customers to Ethernet over Copper.
An analyst at DA Davidson comments, "We expect CBEY to continue to try to focus on training its sales force to sell cloud services to new and existing customers. With the current economic climate, small businesses are much more conservative on business costs and many have found significant savings by outsourcing IT services to the cloud."
Cloud product revenues rose by 12.5 percent between the first and second quarter and the firm anticipates similar growth between the second and third quarter with a slight ramp up between the third and fourth quarter.
For 2011 and 2012, the firm estimates EPS of ($0.08) and $0.20 with $486.8 million and $529.6 million in revenue for the two years.
For more ratings news on Cbeyond click here and for the rating history of Cbeyond click here.
Shares of Cbeyond closed at $7.53 yesterday.
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