Needham & Company Maintains a 'Buy' on CA (CA) on Valuation, Lowering Target & Estimates
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Price: $24.99 --0%
Rating Summary:
0 Buy, 17 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
0 Buy, 17 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company maintains a 'Buy' on CA (NASDAQ: CA) price target lowered from $29 to $25.
Needham analyst says, "The CA results for SeptQ (F2Q12) were solid, although forward guidance was muted on continued difficulties in EMEA, slowdown in new product sales, and general headwind from the macro-environment. Total bookings of $972m (-4% y/y) was a disappointment, and likely pushed management to pull down guidance for FY12. We note there are to be material changes to sales headcount, with 300 new quota reps dedicated (spread worldwide, and already baked in guidance) to SMB/mid-market new product sales, and EMEA is to have a “redrawing” of sales territories. Considering CA has had ongoing challenges in EMEA, we are not alarmed by the upheaval in sales, though it signals progress is likely 1 year away. As such, our expectations for subscription growth are coming down with guidance. The challenges in new product sales are cautionary for us, given the weaker categories were service assurance and virtualization, which are
strong secular spending areas broadly in IT spending."
"The macro headwinds and EMEA challenges led CA to revise guidance for FY12 from $4900-5000m, $2.14-2.21 EPS, $1.48-1.51B cfops all down to $4700-4800m, $2.13-2.18 EPS and cfops $1.44-1.70B. Our new estimates for FY12 are $4815m and $2.15 EPS, and cfops of $1.46B. We are lowering FY13 materially on weak bookings, from 5312m and $2.44 EPS down to 5077m and $2.28 EPS."
For more ratings news on CA click here and for the rating history of CA click here.
Shares of CA closed at $22.02 yesterday.
Needham analyst says, "The CA results for SeptQ (F2Q12) were solid, although forward guidance was muted on continued difficulties in EMEA, slowdown in new product sales, and general headwind from the macro-environment. Total bookings of $972m (-4% y/y) was a disappointment, and likely pushed management to pull down guidance for FY12. We note there are to be material changes to sales headcount, with 300 new quota reps dedicated (spread worldwide, and already baked in guidance) to SMB/mid-market new product sales, and EMEA is to have a “redrawing” of sales territories. Considering CA has had ongoing challenges in EMEA, we are not alarmed by the upheaval in sales, though it signals progress is likely 1 year away. As such, our expectations for subscription growth are coming down with guidance. The challenges in new product sales are cautionary for us, given the weaker categories were service assurance and virtualization, which are
strong secular spending areas broadly in IT spending."
"The macro headwinds and EMEA challenges led CA to revise guidance for FY12 from $4900-5000m, $2.14-2.21 EPS, $1.48-1.51B cfops all down to $4700-4800m, $2.13-2.18 EPS and cfops $1.44-1.70B. Our new estimates for FY12 are $4815m and $2.15 EPS, and cfops of $1.46B. We are lowering FY13 materially on weak bookings, from 5312m and $2.44 EPS down to 5077m and $2.28 EPS."
For more ratings news on CA click here and for the rating history of CA click here.
Shares of CA closed at $22.02 yesterday.
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