- Jefferies & Co notes that based upon their checks, they believe that Sigmatel (NASDAQ:SGTL) is on track to meet its rev guidance for Q2. Although Q1 was significantly impacted by a likely overshipment in Q4:05, they believe that the low level of customer orders in Q1 allowed SGTL's customers to reduce inventory to more normalized levels and return to ordering in Q2. Firm believes only modest Q/Q increases from its largest MP3 customers will likely allow SigmaTel to achieve the low end of its guidance.
Although they are encouraged about the likely improvement in Q2 fundamentals, the firm remains neutral as they believe risks remain regarding: 1) cash burn and liquidity issues, 2) the signifcant business ramp in 2H:06, and 3) the lack of material traction for its Oasis and Protocom. Maintains Hold and $4.
Notablecalls: Expect the note to create some interest in SGTL. It's been a while since the co has met their guidance or analyst ets.
- Goldman notes that based on the results of our 22nd qtrly study across all key metrics (listings, conversion, ASP, etc), they estimate eBay (NASDAQ:EBAY) will grow rev at least 30% y/y, inline with firm's above-consensus 2Q06 rev/EPS est's of $1,415m/$0.24.
Firm believes eBay's current 2007E P/E multiple implies that eBay's EPS growth rate from 2007-2010 will be 12%-15% (dividing the 2007 P/E by the PEG range of 1.5x-2.0x, the range that growth companies still trade at, in addition to its 14x 2007E EV/EBITDA multiple), well below their estimated 20%-25%.
What will get the stock to work? eBay's multiple contraction despite unchanged estimates, which occurred last spring/summer as well, is a result of several factors including the increased complexity in analyzing the business given the changing seller behavior and mix that leaves investors unsure of its growth rate. In order for the shares to appreciate significantly, investor perception of eBay's long-term growth must improve. We believe that eBay's ability to continue to beat its outlook and meet or beat Street estimates as it has for the last several quarters is the best way to eliminate the uncertainty in its perceived growth rate. Reits Outperform.
Notablecalls: Not actionable but good to know category.
- Goldman is adding Focus Media (NASDAQ:FMCN) to their CIL* as they believe it: 1) is less exposed to negative economic factors; 2) has a demonstrated ability to exceed earnings expectations by growing organically and through M&A; 3) reduction in the previous share offering overhang. Expects Focus to deliver 2Q2006 results at the high end of its guidance range. Tgt is raised to $78 from $76 per ADR.
* Goldman Sachs' Current Investment List (CIL) represents firm's most timely stock recommendations for total return over the next 12 months.
Notablecalls: I would not be surprised to see some interest in FMCN today.
Although they are encouraged about the likely improvement in Q2 fundamentals, the firm remains neutral as they believe risks remain regarding: 1) cash burn and liquidity issues, 2) the signifcant business ramp in 2H:06, and 3) the lack of material traction for its Oasis and Protocom. Maintains Hold and $4.
Notablecalls: Expect the note to create some interest in SGTL. It's been a while since the co has met their guidance or analyst ets.
- Goldman notes that based on the results of our 22nd qtrly study across all key metrics (listings, conversion, ASP, etc), they estimate eBay (NASDAQ:EBAY) will grow rev at least 30% y/y, inline with firm's above-consensus 2Q06 rev/EPS est's of $1,415m/$0.24.
Firm believes eBay's current 2007E P/E multiple implies that eBay's EPS growth rate from 2007-2010 will be 12%-15% (dividing the 2007 P/E by the PEG range of 1.5x-2.0x, the range that growth companies still trade at, in addition to its 14x 2007E EV/EBITDA multiple), well below their estimated 20%-25%.
What will get the stock to work? eBay's multiple contraction despite unchanged estimates, which occurred last spring/summer as well, is a result of several factors including the increased complexity in analyzing the business given the changing seller behavior and mix that leaves investors unsure of its growth rate. In order for the shares to appreciate significantly, investor perception of eBay's long-term growth must improve. We believe that eBay's ability to continue to beat its outlook and meet or beat Street estimates as it has for the last several quarters is the best way to eliminate the uncertainty in its perceived growth rate. Reits Outperform.
Notablecalls: Not actionable but good to know category.
- Goldman is adding Focus Media (NASDAQ:FMCN) to their CIL* as they believe it: 1) is less exposed to negative economic factors; 2) has a demonstrated ability to exceed earnings expectations by growing organically and through M&A; 3) reduction in the previous share offering overhang. Expects Focus to deliver 2Q2006 results at the high end of its guidance range. Tgt is raised to $78 from $76 per ADR.
* Goldman Sachs' Current Investment List (CIL) represents firm's most timely stock recommendations for total return over the next 12 months.
Notablecalls: I would not be surprised to see some interest in FMCN today.
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