Virtusa (VRTU) PT Raised to $32 at Needham & Company

Needham & Company raised its price target on Virtusa (NASDAQ: VRTU) to $32.00 (from $24.00) while maintaining a Buy rating, following solid Q3 results saying the stage is set for improving revenue and margin trends.

Analyst Mayank Tandon commented, "VRTU delivered solid 3Q results on the back of broad based growth in the core verticals and geographies. The pipeline is healthy, and even with added caution among healthcare clients ahead of potential changes to the ACA, VRTU is guiding to solid sequential revenue growth. Additionally, management remains focused on improving utilization and reducing SG&A overhead to drive sustainable operating margin expansion. While our FY17 estimates are largely unchanged, we are bumping up our FY18 revenue estimate but lowering our EPS forecast, primarily to reflect more gradual operating margin expansion. With a favorable risk-reward and positive revenue and margin trends in place we are reiterating our BUY rating and raising our target to $32."

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