Think Equity’s Woodburn Maintains Verenium at Buy – Cuts Price Target to $2
Source: http://feedproxy.google.com/~r/smallcappulse/feed/~3/FEjywQxaw-g/Posted on Tuesday, August 18th, 2009 | In Market Commentary, Small & Micro Cap
August 17, 2009 ndash; Analyst Comments ndash; Think Equityrsquo;s David Woodburn commented on Verenium Corporation (Nasdaq:VRNM) maintained his BUY rating and lowering price target at $2 – still more than 217% higher than Fridayrsquo;s close. What has Woodburn so bullish on Verenium?
Key Takeaways
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Continues to expect improved visibility on biofuels will come from more from government funding announcements than VRNM-specific milestones in the near term. Looking for loan guarantee on Highlands County commercial facility.
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Thinks upfront cash contributions validate Vereniumrsquo;s technology and commercial prospects
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Q1 revenues of $16.3 million beat Woodburnrsquo;s $15.2 million estimate
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Product gross margin of 29% came in below estimated 45.5%; EPS of ($0.14) beat ($0.19) expectations
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Management has been working with energy cane (similar to sugar cane) as feedstock lately and results are positive
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Increasing FY09 revenue forecast to $66 million from $65 million, but reducing GM to 39.4% from 45.5%, and FY09 EPS estimates increase slightly to ($0.64) from ($0.69)
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Decreasing price target to $2 based on NPV calculation of enzyme business at $1.64 per share, and an EV/gallon capacity multiple of $0.20/gallon to cellulosic ethanol capacity of $0.40 per share.
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