Global Hunter’s Justin Cable Maintains NEUTRAL Rating on Echelon – $7 Price Target
Source: http://feedproxy.google.com/~r/smallcappulse/feed/~3/OtgjUGbNnzw/Posted on Saturday, August 1st, 2009 | In Market Commentary, Small & Micro Cap
July 31, 2009 ndash; Analyst Comments – nbsp;Global Hunterrsquo;s Justin Cable weighed in on Echelonrsquo;s Q2 financial results, which came in slightly above expectations, ldquo;but down significantly Y/Y.rdquo; Cable is maintaining his NEUTRAL rating and $7 price target on the stock.
Q2 Results
Revenues were $22.6 million, compared with $18.2 million in Q1 and $32.2 million in Q208. Gross margin was 43.2%, compared with 43.4% in Q1 and 39.6% in Q2. Net loss for Q2 was $9.5 million, or $0.26 per share, compared with a net loss of $10.6 million in Q1 and $7.4 million in Q208. In terms of guidance, management said total revenue for Q3 will be about $21 to $23 million with gross margin in a range of 43% to 45%. Loss per share will be between $0.24 and $0.26.
Cablersquo;s Takeaways
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Guidance was slightly ahead of estimates.
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; It appears Lon Works revenues are stabilizing at about $11M per quarter
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Revised estimates lower for remainder of FY09 and FY10 to reflect continued losses and cash burn.
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; An upside to the thesis is any signal that energy efficiency projects are accelerating
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Remaining NEUTRAL until evidence that pipeline activity is transitioning to orders
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; $7 price target based on 2.1 EV/sales multiple against FY10 projections
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