ISLD - given $65 target, more:
Check THIS out:
on24.com
Text transcript here of the above:
Digital Island (ISLD) 30 5/8 +5 5/16: Digital Island is trying to stage a long overdue comeback from the recent NASDAQ correction and the shares are up 20% today with some help from Wedbush Morgan who initiated coverage with a STRONG BUY rating and $65 price target this morning. ISLD shares have not participated in the recent recovery we're seeing in many of the tech names until this morning when they were awarded a 12-month price target that represents a 157% return from yesterday's closing level. As we predicted a few months ago, it is the big names that have lead the recovery in NASDAQ, and as a secondary play, we're not surprised that ISLD has lagged behind. Inktomi (INKT) has clearly outperformed the other players in the space year-to-date, and we would suggest that Akamai (AKAM) and CacheFlow (CFLO) along with Digital Island (ISLD) will follow the lead. There is no question that Internet content delivery will continue to see strong demand and rapid growth, the only question lies in the market's valuations, and from that perspective, ISLD shares look good. Although the company is still bleeding red ink, at a P/S ratio of 32x, their +400% annual and 49% sequential (in Q2) revenue growth is being discounted by the market when compared to AKAM's 410x and CFLO's 54x P/S ratios. ISLD is a smaller, less mature version of AKAM, but based on ttm sales, is comparable to CFLO in size, yet has not been rewarded with the same type of valuation. It is true that the company did post a larger-than-expected loss in their April quarter, and CFLO has a perfect record of beating estimates, but Digital Island was dealing with integration issues surrounding their acquisition of Sandpiper Networks in Q2. In addition to the overall market growth potential, we like ISLD's full suite of services -- web-hosting, content delivery, network services and streaming and professional services. We are also comforted by ISLD's strong cash position of $720 mln that should fund operations through 2002. Remember, this is a stock that traded as high as $156 in December, and although we hesitate to use that for comparison, it does suggest that $65 price target is not unreasonable.
and don't forget ....
ISLD - $65 price target set!
Alert: Wedbush Morgan initiates coverage of ISLD at Strong Buy, price target $65
(Headline only) Briefing.com, 06/07/2000 10:43 AM EDT
quicken.excite.com
JMHO, FWIW ....
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