Needham & Company Maintains a 'Hold' on Blue Coat Systems (BCSI) Following Surprise Upside in OctQ
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Price: $25.82 --0%
Rating Summary:
0 Buy, 7 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
0 Buy, 7 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company maintains a 'Hold' on Blue Coat Systems (NASDAQ: BCSI).
Needham analyst says, "The Blue Coat performance for OctQ was strong with a solid beat on license as well as total revenue and EPS. The field color going into the stretch for BCSI was weak, as we heard of sales organization disruption connected to the departure of former CEO Borman in August, and as new CEO Greg Clark joined. Although our Security and Infrastructure software group had overall solid field checks and earnings performance despite difficult macro-headlines, we have for several quarters heard of anemic demand in the field specifically for BCSI, with no change in our recent discussions. That said, we believe Clark is getting some positive short-term improvement in production from dismantling some existing “overlay/matrix” sales structure and making regions more accountable for performance. It is our belief new CEO Greg Clark likely called an “all hands” emergency push internally upon his arrival, as BCSI was rumored to be for sale and the company had guided below the Street in its last several quarters. In our view, the extension of Elliott Assoc’s standstill agreement from Oct 25th until December 10th suggests the activist is deepening its due diligence and may try to facilitate and participate in strategic alternatives for BCSI. We feel it is unlikely fundamentals have materially improved at the company, despite the strong OctQ results, and we still view BCSI as a financial buyer acquisition target, suggesting only modest upside from the $20 aftermarket share level, which is 14x our new FY13 $1.02 EPS estimate and 1.3x EV/FY13 revenue."
For an analyst ratings summary and ratings history on Blue Coat Systems click here. For more ratings news on Blue Coat Systems click here.
Shares of Blue Coat Systems closed at $16.91 yesterday.
Needham analyst says, "The Blue Coat performance for OctQ was strong with a solid beat on license as well as total revenue and EPS. The field color going into the stretch for BCSI was weak, as we heard of sales organization disruption connected to the departure of former CEO Borman in August, and as new CEO Greg Clark joined. Although our Security and Infrastructure software group had overall solid field checks and earnings performance despite difficult macro-headlines, we have for several quarters heard of anemic demand in the field specifically for BCSI, with no change in our recent discussions. That said, we believe Clark is getting some positive short-term improvement in production from dismantling some existing “overlay/matrix” sales structure and making regions more accountable for performance. It is our belief new CEO Greg Clark likely called an “all hands” emergency push internally upon his arrival, as BCSI was rumored to be for sale and the company had guided below the Street in its last several quarters. In our view, the extension of Elliott Assoc’s standstill agreement from Oct 25th until December 10th suggests the activist is deepening its due diligence and may try to facilitate and participate in strategic alternatives for BCSI. We feel it is unlikely fundamentals have materially improved at the company, despite the strong OctQ results, and we still view BCSI as a financial buyer acquisition target, suggesting only modest upside from the $20 aftermarket share level, which is 14x our new FY13 $1.02 EPS estimate and 1.3x EV/FY13 revenue."
For an analyst ratings summary and ratings history on Blue Coat Systems click here. For more ratings news on Blue Coat Systems click here.
Shares of Blue Coat Systems closed at $16.91 yesterday.
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