Needham & Company Reiterates a 'Buy' on iGATE (IGTE); Surge Drives EPS Beat; PTI Integration Progressing Well
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Price: $48.00 --0%
Rating Summary:
4 Buy, 6 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
Rating Summary:
4 Buy, 6 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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Needham & Company reiterates a 'Buy' on iGATE (NASDAQ: IGTE) price target of $23.00.
Needham analyst says, "IGTE reported strong EPS for 3Q, easily beating estimates on the back of a spike in margins. We believe the strong margin performance, driven by cost synergies from the Patni (NYSE: PTI)(NR) acquisition integration, and improving underlying metrics (attrition, utilization and realization) show the PTI integration is progressing well. The margin performance also gives us added confidence in management's ability to hit its stated 25% EBITDA and 40% gross margin target earlier than the 2 year goal initially laid out by management in May. While the low hanging fruit has been picked, we look for further margin expansion coupled with improving revenue growth once the sales engine is integrated, potentially in 1H FY12, as drivers of earnings upgrades. While IGTE has had a nice bounce of the bottom, with the stock trading at ~10x our FY12 EPS estimate we see potential for further stock price appreciation as our earnings upside case plays out."
For more ratings news on iGATE click here and for the rating history of iGATE click here.
Shares of iGATE closed at $15.14 yesterday.
Needham analyst says, "IGTE reported strong EPS for 3Q, easily beating estimates on the back of a spike in margins. We believe the strong margin performance, driven by cost synergies from the Patni (NYSE: PTI)(NR) acquisition integration, and improving underlying metrics (attrition, utilization and realization) show the PTI integration is progressing well. The margin performance also gives us added confidence in management's ability to hit its stated 25% EBITDA and 40% gross margin target earlier than the 2 year goal initially laid out by management in May. While the low hanging fruit has been picked, we look for further margin expansion coupled with improving revenue growth once the sales engine is integrated, potentially in 1H FY12, as drivers of earnings upgrades. While IGTE has had a nice bounce of the bottom, with the stock trading at ~10x our FY12 EPS estimate we see potential for further stock price appreciation as our earnings upside case plays out."
For more ratings news on iGATE click here and for the rating history of iGATE click here.
Shares of iGATE closed at $15.14 yesterday.
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