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Technology Stocks : SONS -- Ignore unavailable to you. Want to Upgrade?

To: Home-Run who wrote (213)	1/14/2005 7:25:26 PM
From: Home-Run	Read Replies (1) \| Respond to of 1575

Sonus Swing: Goldman's Golden Touch? JANUARY 13, 2005 Sonus Networks Inc. (Nasdaq: SONS - message board) has enjoyed a nice two-day rally. The rally comes on the heels of a new reseller agreement with Samsung Electronics Co. Ltd. (Korea: SEC - message board) announced Tuesday (see Samsung Sings Sonus Song ). Under the agreement, Samsung will resell Sonus's GSX9000 softswitch product to wireless service providers globally. There's only one thing puzzling about the timing: It started 24 hours after the Samsung news was released. On Tuesday, the day the Samsung news came out before the markets opened, Sonus stock was in a slumber. On Wednesday, Sonus shot up 8 percent on more than quadruple its average trading volume. The stock rally continue today, rising $0.22 (3.7%) to $6.19. So why the slow take? Some observers say the move may have been catalyzed not by the Samsung news, but by a research note from Goldman Sachs & Co. analyst Brantley Thompson. Thompson wrote in the briefing issued on Wednesday that his firm sees a possible 35 percent upside for Sonus in the coming year, and upgraded the U.S. telecom equipment space from Neutral to Attractive. At the root of Thompson's optimism is the fierce competition among equipment buyers to offer VOIP. “Market demand will improve as cable vendors expand the VOIP services push, adding pressure for incumbents to step up the pace on VOIP deployments and capabilities," Thompson says in the brief. The Sonus stock price seemed to react to the Goldman Sachs brief, rather than the Samsung partnership announcement the day before. Motorola Inc. (NYSE: MOT - message board), another reseller of Sonus gear, was also praised in the brief, and its stock responded with an uptick of 58 cents to $17.05 in midday trading Thursday. “I don't think the Samsung agreement by itself means much, but when put in the context of their strategy it means something," says analyst Eric Buck of Janco Partners Inc.. “When you consider their other partnerships with Motorola and Marconi, it seems like they are following through on their strategy to build reseller and OEM partnerships." This notion, and the idea that more such partnerships are on the way, are probably what prompted the warm words from Thompson. “Additional partnerships with major equipment vendors who lack key parts of the VOIP product line will help fuel upside," the brief reads. “SONS position is becoming more entrenched with... a growing list of re-seller partners including Motorola, Samsung, and Marconi." Buck believes that partnerships like Samsung usually don't even get announced unless it has already yielded a new, substantial customer. Such a customer has yet to be announced, but Buck isn't the only one who believes that its in the works. “Expect continued new customer momentum," Thompson says in the Goldman Sachs brief. “We believe there are unannounced major carrier contracts in the U.S., India, and Europe." — Mark Sullivan, Reporter, Light Reading

To: Home-Run who wrote (213)	1/17/2005 12:11:28 AM
From: Home-Run	Respond to of 1575

ThinkEquity 14-Jan Report on Sonus Time Warner Telecom Accelerates VoIP Deployment with Sonus Gear We remain comfortable with our Q4 estimates and believe the large purchase order Sonus received from Time Warner Telecom in the December quarter will most likely show up on the company's Q4 balance sheet as deferred revenues. Time Warner has been a long standing SONS customer, but has finally started accelerating deployment of its SONS based network and will be rolling out VoIP services to 25-30 additional markets throughout 2005. We believe SONS represents one of the best ways to play the rapidly growing VoIP space and we believe the company's pure-play VoIP exposure deserves a premium valuation over other equipment vendors. We are reiterating our Buy rating and $9 price target on SONS shares. Fiscal Year Dec F04E F05E F06E 3Q04A 4Q04E 4Q03A Revenue(Current $) Revenue(Previous $) $175.65 $175.65 $236.23 $236.23 $311.16 $311.16 $46.76 $46.76 $50.00 $50.00 -- -- EPS(Current $) EPS(Previous $) $0.11 $0.11 $0.17 $0.17 $0.28 $0.28 $0.04 $0.04 $0.02 $0.02 -- -- P/S(Current) P/E(Current) 7.7 56.3 5.8 36.4 4.4 22.1 ?br>?br>?br>?br>?br>?br>SONS Lands Time Warner Telecom Order - We believe SONS received a $15-$20 million purchase order from Time Warner Telecom in Q4. The order will most likely result in revenues during early 2005, but should show up on the balance sheet as deferred revenues when SONS reports Q4 results. Deployment Plans - Time Warner has a 3 phase deployment plan and will offer VoIP services in 25-30 additional markets by year end. We believe this build out will also benefit Sylantro (hosted IP telephony), Kagoor (session border controllers), and IP Unity (unified messaging and email). Sonus Announces New CFO - Sonus has appointed a long awaited CFO. Ellen Richstone has joined Sonus as CFO and will be reporting to Sonus' president and COO, Bert Notini. Samsung Partnership Strengthens Wireless Initiative - Sonus announced a strategic reseller relationship with Samsung earlier this week. This partnership is similar to the Motorola announcement and should help Sonus penetrate wireless service providers by leveraging Motorola and Samsung's relationships in this space. Investment Conclusion - We are reiterating our Buy rating and $9 price target on SONS shares. Our price target represents a 30x multiple applied to our 2006 operating income assumption plus cash. We believe a 30x multiple could prove to be conservative given our expectations for 30%+ revenue growth and the high degree of leverage in the SONS model. - from yhoo board finance.messages.yahoo.com