Needham & Company Maintains a 'Buy' on Progress Software (PRGS) on Potential M&A
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Price: $43.73 -2.24%
Rating Summary:
9 Buy, 5 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
9 Buy, 5 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company maintains a 'Buy' on Progress Software (NASDAQ: PRGS) price target lowered from $25 to $21.
Needham analyst says, "Progress, with its new CEO, has “hit the reset button”, guiding well below the Street for FebQ and accepting the resignation of Head of Field Operations/Sales, Chris Larsen, whom we viewed as a strong executive. Importantly, we are seeing a decline in revenue, largely from the EBS division (formerly fast growing) – and with it, we are hearing plans for continued investment at PRGS, as it pursues its vision of Responsive Process Management (RPM) and solution selling. At this point, one asks whether there is continued downside in shares, beyond Wednesday’s -12% drop to the $17.50 range; our view is that shares have likely bottomed, as there has been support over the last 6-9months near the $18 range, during the last 3 disappointing quarters. Our FY12 goes from $560m and $1.71 EPS, down to $522m and $1.22 EPS, as our operating margins drop from 29% down to 22% on continued investment, with declining revenue. We note the 22% operating margin in our FY12 model is roughly equal to the FY09 operating margins at the company, pre-restructuring. We are maintaining our BUY rating, based on the prospect of PRGS being acquired."
For an analyst ratings summary and ratings history on Progress Software click here. For more ratings news on Progress Software click here.
Shares of Progress Software closed at $17.69 yesterday.
Needham analyst says, "Progress, with its new CEO, has “hit the reset button”, guiding well below the Street for FebQ and accepting the resignation of Head of Field Operations/Sales, Chris Larsen, whom we viewed as a strong executive. Importantly, we are seeing a decline in revenue, largely from the EBS division (formerly fast growing) – and with it, we are hearing plans for continued investment at PRGS, as it pursues its vision of Responsive Process Management (RPM) and solution selling. At this point, one asks whether there is continued downside in shares, beyond Wednesday’s -12% drop to the $17.50 range; our view is that shares have likely bottomed, as there has been support over the last 6-9months near the $18 range, during the last 3 disappointing quarters. Our FY12 goes from $560m and $1.71 EPS, down to $522m and $1.22 EPS, as our operating margins drop from 29% down to 22% on continued investment, with declining revenue. We note the 22% operating margin in our FY12 model is roughly equal to the FY09 operating margins at the company, pre-restructuring. We are maintaining our BUY rating, based on the prospect of PRGS being acquired."
For an analyst ratings summary and ratings history on Progress Software click here. For more ratings news on Progress Software click here.
Shares of Progress Software closed at $17.69 yesterday.
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