- Stifel Nicolaus & Co comments on EMC (NYSE:EMC) after the co announced its intent to acquire RSA in an all cash deal valued at $2.1 billion or $28 per share. Firm believes the premium paid looks very expensive and frankly excessive when looking at premium, EV-to-revenue, and EV-to-EBITDA. Based on our discounted cash flow analysis, the takeout valuation implies that RSA will have to grow operating cash flow in excess of 27% over the next few years, which seems aggressive. Clearly, this was a competitive bidding process and based on comments on the conference call they suspect Symantec and potentially HP could have also been involved.
Expects EMC shareholders to scratch their heads with respect to price paid and strategic fit. Synergies between EMC's business and RSA are not very apparent.
This may or may not spark a run on other authentication players and there is no one with the size and scale of RSA. Other key players in the sector would include Vasco Data Security (VDSI), Secure Computing (SCUR), Aladdin (ALDN) and ActivIdentity (ACTI).
Notablecalls: Not actionable but good to know category.
- RBC Capital says their channel checks on Secure Computing (NASDAQ:SCUR) thusfar have indicated that the co should come in towards the mid-point of their Q2 revenue/EPS guidance of $43-$45M/ $0.10-$0.12 vs RBC of $44M/$0.10. Strength in the quarter appears to be driven by sales of SecureWire, Webwasher, SnapGear and general strength across the core Secure businesses.
With $1.65 in cash and roughly $2.00 in allowable tax affected NOL ($3.00 in total NOL), investors are currently paying less than $4.50 for the enterprise, which is a bargain in firm's mind. Maintains Outperform rating and $14 price target.
Notablecalls: Traders should keep SCUR on their radars over the next week or so.
Expects EMC shareholders to scratch their heads with respect to price paid and strategic fit. Synergies between EMC's business and RSA are not very apparent.
This may or may not spark a run on other authentication players and there is no one with the size and scale of RSA. Other key players in the sector would include Vasco Data Security (VDSI), Secure Computing (SCUR), Aladdin (ALDN) and ActivIdentity (ACTI).
Notablecalls: Not actionable but good to know category.
- RBC Capital says their channel checks on Secure Computing (NASDAQ:SCUR) thusfar have indicated that the co should come in towards the mid-point of their Q2 revenue/EPS guidance of $43-$45M/ $0.10-$0.12 vs RBC of $44M/$0.10. Strength in the quarter appears to be driven by sales of SecureWire, Webwasher, SnapGear and general strength across the core Secure businesses.
With $1.65 in cash and roughly $2.00 in allowable tax affected NOL ($3.00 in total NOL), investors are currently paying less than $4.50 for the enterprise, which is a bargain in firm's mind. Maintains Outperform rating and $14 price target.
Notablecalls: Traders should keep SCUR on their radars over the next week or so.
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