Needham & Company Raises Price Target on LifeLock (LOCK) to $20; Reiterates Buy
Needham & Company reiterated a Buy rating on LifeLock (NYSE: LOCK), and raised the price target to $20.00 (from $18.00), following the company's 2Q earnings report. LOCK's reported revenue and EPS of $164.4m and $0.07 EPS were both above consensus estimates of $163.3m and $0.04 EPS. 2016 guidance was maintained at $662-670m revenue and $0.74-0.78 EPS.
Analyst Scott Zeller commented, "The LOCK JuneQ results were a beat and reiterate. Though most of the previous CY16 guidance metrics were reiterated, FCF for CY16 was reduced materially, from $93-98m to $83-88m, mostly driven by a disappointing number of partners ramping for LOCK (partner-driven signups pre-pay). It is clear that LOCK is still finding its footing post-settlement, as subscriber adds and retention dropped slightly y/y. That said, we believe LOCK is a value stock now, and we believe Elliott will agitate for a sale. Importantly, LOCK reiterated its revenue, EPS and Adj EBITDA guidance for the year, and we anticipate any potential suitors would be focusing on EBITDA. Maintain BUY, raise PT from $18 to $20. Shares closed near $16.65, or 1.9x EV/CY17 revenue and 14x EV/CY17 EBITDA; our $20 target is 2.3x EV/CY17 revenue and 18x EV/CY17 EBITDA."
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Shares of LifeLock closed at $16.65 yesterday.