Monday, January 29, 2007

Calls of Note Part 4

- Piper Jaffray reiterates aQuantive (NASDAQ:AQNT) as their top small/mid cap Internet pick for 207. Firm believes catalysts for shares include: 1) strong 4Q results; 2) increasing traction internationally, especially for its agency services; and 3) increased visibility into 2007 estimates and the roll-out of Street 2008 estimates. They believe shares are attractive at 14x 2007 EBITDA vs. 20% LT EBITDA growth and relative to DTAS' acquisition multiple of 16x '07. Firm would be buyers of AQNT shares ahead of what they believe will be a very solid 4Q performance.

Based on recent channel checks, they have increased confidence that aQuantive will report very strong 4Q results, likely exceeding the high end of revenue and earnings guidance. While the firm expects strength across the board in the seasonally strong 4Q, they will likely see the most upside from the Digital Marketing Services segment as checks indicate robust demand for agency services. Checks also indicate that full year 2007 demand is very robust, which increases firm's confidence in their estimates and they believe we will see upside to firm's 17% organic growth estimate for DMS.

Maintains Outperform and $34 tgt.

Notablecalls: May see some buy interest.

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