ThinkEquity is positive on Acme Packet (NASDAQ:APKT) ahead of results scheduled for tonight saying industry sources and competitors' public statements lead tem to believe that 4Q06 was good across the SBC market. While the firm believes different competitors have brought differentiated products to market, a big factor in the sub-Tier 1 account wins (and even niche applications within Tier 1s) remains market coverage. They are not increasing their estimates today although they believe there is upside to their model if Acme can maintain its market share. Believes that Acme Packet (APKT) is a strategic asset in the heart of the fast-growth Internet infrastructure market.
Some private companies claim that they are maintaining 100%+ growth rates, albeit off modest bases. Also, AudioCodes, which owns the Netrake business, held its conference call yesterday noting that its SBC business grew in 4Q "a few times that" of 3Q.
Competitive products are also not necessarily directly competitive just because they are classified as SBC. A Bentley and a Ford both have four wheels, and engine and a steering wheel, but they remain very different in terms of market acceptance. The same thing is true with SBCs, in that an Acme SBC is dominant in a somewhat different part of the market than for example an SBC from a certain privately held company.
Firm's 12-month target price of $25 implies a market cap of almost $1.6bn. Approximately 10% of the market cap is in cash. With our 2008 revenue estimate at $149m, their new price target implies a valuation of approximately 10x estimated 2008 revenue, plus cash.
Notablecalls: APKT has been a recent momentum favourite and I suspect comments by ThinkEquity will generate some buy interest today. It also looks to have Cramer's blessing.
Some private companies claim that they are maintaining 100%+ growth rates, albeit off modest bases. Also, AudioCodes, which owns the Netrake business, held its conference call yesterday noting that its SBC business grew in 4Q "a few times that" of 3Q.
Competitive products are also not necessarily directly competitive just because they are classified as SBC. A Bentley and a Ford both have four wheels, and engine and a steering wheel, but they remain very different in terms of market acceptance. The same thing is true with SBCs, in that an Acme SBC is dominant in a somewhat different part of the market than for example an SBC from a certain privately held company.
Firm's 12-month target price of $25 implies a market cap of almost $1.6bn. Approximately 10% of the market cap is in cash. With our 2008 revenue estimate at $149m, their new price target implies a valuation of approximately 10x estimated 2008 revenue, plus cash.
Notablecalls: APKT has been a recent momentum favourite and I suspect comments by ThinkEquity will generate some buy interest today. It also looks to have Cramer's blessing.
No comments:
Post a Comment