Calls of Note Part 2

- Frederick Ziegel from Soleil's Mackinac Research initiates coverage of iPass (NASDAQ:IPAS) with a Buy rating and an $8 target price derived from firm's DCF analysis. The target price also correlates to a 23 multiple applied to firm's 2008 EPS estimate of $0.34 per share, which they believe is ultimately achievable given the uniqueness of the iPass Mobile Office service offering. According to Ziegel, the next 2-3 quarters mark a pivotal period for IPAS as they try to offset declining dial-up Internet access revenues with broadband/ security software/services revenues, eliminate $5 million per quarter of cash operating expenses, shift from usage-based to flat rate pricing which has some interesting (positive) revenue implications, drive more revenues through channel partners and interact with activist shareholders who currently own 14% of the stock. If they execute successfully, they believe iPass can return to mid- teens revenue growth and low-teens operating margins in 2008. Someone is going to unlock the value.

Notablecalls: IPAS has an interesting niche offering and from time to time I have been positive on the co. The stock has gotten hit badly over the last 3-4 months and I believe that at current levels it's worth taking a look at.