Needham & Company Maintains a 'Hold' on SolarWinds (SWI) on Valuation Following Solid SeptQ and Outlook
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Price: $18.49 --0%
Rating Summary:
9 Buy, 21 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
9 Buy, 21 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company maintainsa a 'Hold' on SolarWinds (NYSE: SWI).
Needham analyst says, "The SolarWinds SeptQ results were very solid, beating consensus revenue and EPS on the strength of government spending, as well as commercial strength. We believe SolarWinds’ franchise is performing well despite the uncertain IT spending environment due to its feature/value message, delivering high functionality monitoring solutions for a modest $8500 ASP; as evidence, we point to the transaction volumes for “core products”, which was +39% y/y in SeptQ (and +36% y/y in JuneQ), suggesting SWI’s recent acquisition strategy is not required for sustaining growth. We have been skeptical of SWI’s ability to maintain 50% operating margins through CY11, but have been proven wrong – we believe SWI’s ability to control costs, combined with the “outsized” profitability of upside revenue, have combined to sustain better than expected margins, despite the M&A and investment program during CY11."
"DecQ guidance was raised marginally; revenue of $52.8-54.2m & $0.23-0.25 EPS (53.5m, 0.24 midpt) is modestly above $53.3m and $0.23 EPS consensus. CY12 guidance will be shared at analyst day. Our DecQ goes from $54m and $0.22 to $54m and $0.25 EPS; our CY12 goes from $230m and $1.00 to $230m and $1.03 EPS."
For more ratings news on SolarWinds click here and for the rating history of SolarWinds click here.
Shares of SolarWinds closed at $27.79 yesterday.
Needham analyst says, "The SolarWinds SeptQ results were very solid, beating consensus revenue and EPS on the strength of government spending, as well as commercial strength. We believe SolarWinds’ franchise is performing well despite the uncertain IT spending environment due to its feature/value message, delivering high functionality monitoring solutions for a modest $8500 ASP; as evidence, we point to the transaction volumes for “core products”, which was +39% y/y in SeptQ (and +36% y/y in JuneQ), suggesting SWI’s recent acquisition strategy is not required for sustaining growth. We have been skeptical of SWI’s ability to maintain 50% operating margins through CY11, but have been proven wrong – we believe SWI’s ability to control costs, combined with the “outsized” profitability of upside revenue, have combined to sustain better than expected margins, despite the M&A and investment program during CY11."
"DecQ guidance was raised marginally; revenue of $52.8-54.2m & $0.23-0.25 EPS (53.5m, 0.24 midpt) is modestly above $53.3m and $0.23 EPS consensus. CY12 guidance will be shared at analyst day. Our DecQ goes from $54m and $0.22 to $54m and $0.25 EPS; our CY12 goes from $230m and $1.00 to $230m and $1.03 EPS."
For more ratings news on SolarWinds click here and for the rating history of SolarWinds click here.
Shares of SolarWinds closed at $27.79 yesterday.
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