This is the conference review, they should update their individual research for SONS in the next day or two. Obviously they are raising their EPS, price target, revenue growth, and signaling that once we start peering into 2008 all of the above will go up yet again. This guy is finally coming in line with what I've been thinking all along. sorry for the format. Cooters
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SONS(OP/$7.80TP). Consistent with our preview, SONS provided a very strong near and
long-term outlook. Hassan Ahmed, SONS’s CEO, noted a very strong start to the December
quarter and that he expects further acceleration in both the carrier VoIP market opportunity
and SONS’s business in CY07. He specifically noted a strong and growing customer pipeline
with broadening customer, product and geographic contributions. He also expressed
confidence in SONS’s ability to maintain current gross margin levels and drive profitability
given the stable pricing environment.
Notwithstanding the recent run-up in SONS’s shares, we think there is meaningful further
upside to come. SONS’s comments support the view that the fourth quarter is tracking above
Street expectations and, more importantly, that there is likely meaningful upside to our Street
high $329mln and $0.27 options expensed ($0.30 non-expensed) estimates. FY07 growth on
the order of 30% v. our current 23% FY07 forecast and 37% FY06 forecast would drive
revenue of over $350mln and, we estimate, approximately an additional $0.05 of EPS.
Allowing for multiple expansion to around 30x FY07 non-expensed EPS estimate suggests
that there is a path to a $10+ stock. Go out another four to six months when we start to look at
FY08 numbers and we believe that there could be yet further upside from there. |
