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Thursday, July 13, 2006

Calls of Note Part 2

- First Albany reits their Buy rating on Hyperion Solutions (NASDAQ:HYSL) saying they expect the company to meet or exceed consensus forecasts of $201M revenue and $0.43 PF EPS.

Whereas firm's checks indicated a slow pace of business in the prior two quarters, industry contacts sensed a reinvigorated pace of large deal closure during the June quarter. THey believe this reflects: 1) improved execution and spillover following a soft March quarter; 2) seasonal 4Q strength; and 3) tentatively, increased acceptance of the System 9 product cycle.

If their assessment is correct, HYSL may have closed 2-4 transactions worth over $3M each, plus 2 transactions worth $2M each, and a handful of transactions worth $500K-$1.5M, across diverse verticals and geographies. While the firm is less certain of the overall pace of small/mid-sized transactions, the prospect of improving large-deal success is encouraging.

At 8.8x EV/FTM OCF, HYSL shares trade at a discount to coverage universe at 13.1x.

Notablecalls: Must say I find it hard to believe HYSL is out-executing every competitor in the sector. I suggest you check out what BOBJ had to say last week

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