UPDATE: Dougherty & Co Upgrades LifeLock (LOCK) to Buy

Dougherty & Co upgraded LifeLock (NYSE: LOCK) from Neutral to Buy with a price target of $19. The change follows strong Q3 results and news it reached settlement agreement with the FTC.

"LOCK beat 3Q by $5M/$0.03, raised its FY15 guidance (at midpoints) by $6M/$0.03, and more importantly announced agreements with FTC staff and representatives of a national class of consumer on a comprehensive settlement to resolve outstanding litigation. The company reserved an additional $96 million (excluded from our estimates on this page) which includes a $3 million reserve for a potential settlement with state attorneys general. The settlements are not final (see details below) but we view the approvals largely as formalities with the worse case scenario potentially consisting of a modestly larger payment," said Maxa.

The analyst added, "The FTC litigation affected LOCK's business and contributed to a higher COA and a lower retention rate. We expect these trends to continue in the near term, but expect improvements following the potential settlements. We are increasing our estimates and are raising our Rating to Buy from Neutral. Our $19.00 Price Target is based on 20x FY16 EPS plus estimate cash (post settlement)."

For an analyst ratings summary and ratings history on LifeLock click here. For more ratings news on LifeLock click here.

Shares of LifeLock closed at $9.69 yesterday.

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