SONS Message Board - Msg: 23737755

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Technology Stocks : SONS

SONS 7.830

+2.8%

Nov 28 4:00 PM EST

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From: carranza2	7/27/2007 6:48:32 AM
	of 1575

Citi maintains buy rating: 26 July 2007 / 8 pages Sonus Networks Inc (SONS) Rating change N Sonus Announces Revenue Shortfall; Lowering Estimates Target price change Y and Target, But Maintaining Buy Rating Estimate change Y * Key Takeaway - While today's negative announcement is disappointing, we believe the VoIP market is still healthy and that Sonus's leadership position is secure. We are lowering our estimates and reducing Buy/Speculative our price target to $9.50. We maintain our Buy rating 1S and view sell off as an over-reaction that presents a buying opportunity. Price (26 Jul 07) * Negative Announcement - SONS announced US$6.81 disappointing results today due to customer pushouts, a back end loaded carrier spending environment, and Target price rev. recognition issues. 2Q rev. now expected to be US$9.50 $73.3MM - $75.8MM versus cons. of $84.3MM and our estimate of $82.6MM. FY07 guidance is for revenues of from US$10.50 $317MM - $326MM. Our FY07 est. was $340MM and cons. was $348MM. * Reducing Estimates - Our FY07 estimates are now for Expected share price $323MM in revenues and $0.15 fully-taxed non-GAAP EPS return versus prior estimate of $340MM and $0.17. We also 39.5% reduce FY08 to $391MM/$0.22 from $418MM/$0.25 and FY09 to $489MM/$0.30 from $522MM/$0.33. Expected dividend yield * Reducing Target - We are reducing our target price 0.0% to $9.50 from $10.50 based on ~30x our CY08 cash EPS of $0.31 (note that this is higher than our Expected total return fully-taxed actual EPS). 39.5% * Maintain Buy Rating - We are maintaining our Buy rating as we continue to believe that Sonus is the Market Cap clear leader in the carrier VoIP market and expect US$1,720M continued top line growth of 20 - 25% over the next few years.

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