Monday, August 28, 2006

Calls of Note Part 3

- ThinkEquity is positive on aQuant (NASDAQ:AQNT) after meeting with co's new CFO, Wayne Wisenhart. Firm expects the investment community to undergo a period of adjustment while Mr. Wisenhart, who began four months ago, gets up to speed on the industry and investors get used to his style. While new to the media/advertising industry and AQNT, Mr. Wisenhart has over 30 years of experience in telecommunications, where he provided financial and operational leadership to a number of successful growth companies, including regional wireless carrier Western Wireless. Western Wireless' stock price appreciated approximately eightfold during his tenure as the company's CFO, from January 2003 to September 2005, and the company met or exceeded guidance for eight out of nine reporting quarters. Furthermore, Mr. Wisenhart was part of the management team that sold Western Wireless to ALLTEL for approximately $6 billion.

Firm continues to believe that AQNT will be one of the long-term "winners" in the Internet advertising sector and that shares should trade at a premium versus peers, given the strength of its business and its high growth rate. AQNT shares are currently trading at 16x EV/2006E EBITDA vs. 43% 2006E EBITDA growth or 13x EV/2007E EBITDA vs. 23% EBITDA growth. 12- month price target of $36 is based on 21x EV/2007E EBITDA.

Notablecalls: While I think AQNT is a mover the note belongs to not actionable but good to know category.

- JMP Securities is reiterating Market Outperform rating on PortalPlayer (NASDAQ:PLAY), raising their target price from $12 to $15. Firm is raising their FY07 revenue and GAAP EPS estimates from $189.5 million and $0.36 to $212.8 million and $0.55, assuming an incremental $23 million in revenues and $0.19 in earnings from PLAY's accelerating growth in the non-Apple media player business from SanDisk, Philips, and also potentially MSFT's upcoming Zune media player.

Firm retail channel checks reveal that SanDisk's PortalPlayer-based MP3 player is picking up market share through aggressive pricing for its feature-packed media players. For example, the upcoming SanDisk 8Gbyte media player will retail for $250; identical in price to Apple's lower density 4Gbyte iPod. According to NPD consumer market research data, SanDisk market share in MP3 players increased from 3% in 2Q05 to almost 10% in 2Q06. Industry channel checks also reveal that retailers are preparing for MSFT's upcoming Zune media player, which likely will be powered by PLAY's media player chip, given the close existing MSFT-PLAY relationship and PLAY's design win in Vista Notebook media processors. They note that every 1 million units increase in PLAY's media player chips will likely contribute $0.05 to $0.08 in incremental EPS for PLAY in 2007.

Notablecalls: What can I say. Notes like this one make me all fuzzy and warm inside. PLAY may have 10% upside in it over the next couple of weeks. Around 50c of it may come today.

2 comments:

blogger123 said...

PLAY - did you mean upside or downside 50c?

notablecalls said...

I meant upside. I was wrong.