Things have changed quickly at VG and that $20M+ FCF every Qtr will keep things changing.
Citi, Duetche Bank recently reviewed Vonage's Financials, Business plans and put their stamp of approval on, with Great financing.
Refinance news
Vonage applied for 7 new patents In the last 7 months.
Patent Applications
VG gained 5000 customers 4th qtr, refinanced debt, cut interest in half, they have finally overcome ALL the negatives of the last four years and are ready to progress with their business plan, expanding globally, Monetizing the new products.
Apr. 15 Vonage achieved another Acending Triple Top Breakout with the new preliminary bullish price objective of $7.75
triple top breakout
On 16-Apr-11 -Phoenix Partners Group initiated coverage at a BUY with a $5.75 target
New analyst upgrade
My latest chart - Where will the triple top take us?
Dave's chart
Makes the new analyst look conservative to me - but we are used to it!
Adding customers
Lowering churn
Huge EBITDA
Huge free cash flow
Restructured debt - interest cut in half
Restructured debt with great terms
New products - plan to monetize 2nd half
New services - plan to monetize 2nd half
Infrastructure in place to handle new services
Plan to continue to expand globally
Great new management performing
"Surprise" loan write downs gone forever
Forward 2011 earnings estimates in the $.25+ range
UnderValued compared to it's nearest competitor by 3x
New analyst coverage at a Buy
New patent applications
Market recognising the turnaround - NOT YET!
Compare VG to EGHT - the closest competitor.
EGHT focus is on Business, it still services homes. VG focus is on both, with a bigger home. VG has added Cell phone APPS, Social Networking, So has EGHT.
HOW UNDERVALUED IS VONAGE?
Analysts expect VG 2011 earnings of $.25
Analysts expect EGHT 2011 earnings of $.11
ALL of the comparison Values are at Yahoo Key Statistics. (4/16/11)
VG - $5.00 PPS
Ent Val/Rev (ttm) .........1.40
Ent Val/EBITDA (ttm)... 8.33
Price/Sales (ttm): .........1.22
Rev Per Share (ttm):...... 4.22
EBITDA (ttm): 149M..............................(Per Shr _ .67)
Operating Cash Flow (ttm): 194M...........(Per Shr _ .87)
Levered Free Cash Flow (ttm): 116M......(Per Shr_ .52)
EGHT - $2.93 PPS
Ent Val/Rev (ttm).......... 2.40
Ent Val/EBITDA (ttm).. 23.52
Price/Sales (ttm):.......... 2.61
Rev Per Share (ttm):.... 1.07
EBITDA (ttm): 7M...............................(Per Shr _ .11)
Operating Cash Flow (ttm): 8M................(Per Shr_ .13)
Levered Free Cash Flow (ttm): 4.1M......(Per Shr _ .06)
WHAT DOES THIS MEAN?
If VG was to be Valuated as EGHT, VG PPS would have to go up the stated Value in each case:
Ent Val/Rev (ttm)............1.7X
Ent Val/EBITDA (ttm)..... 2.8X
Price/Sales (ttm):............2.14X
Rev Per Share (ttm): ........3.94X
EBITDA per Shr ...............6.1X
The average is 3.34X
Is EGHT over Valued? NO - fits in nicely with Telcos.
If VG were to be Valued the same as EGHT, with these comparison ratios, VG PPS would be $16.60!
Out of range? Check out the Google stockscanner; stocks with a $500M to $2B market cap, and $.24 - $.36 in earnings. (watch that 1st Q earnings report on May 4th, in 2 weeks to validate $.06 - $.09 for the 1st qtr)
$16.00 is in the mid range! The lowest PPS is $4.70! Highest is $43
GOOGLESCAN]
BUYING OPP
JMO Dave |
