Needham & Company Upgrades SolarWinds (SWI) to Buy; Positive Analyst Day
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Price: $18.49 --0%
Rating Summary:
9 Buy, 21 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 2
Rating Summary:
9 Buy, 21 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 2
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Needham & Company upgraded SolarWinds (NYSE: SWI) from Hold to Buy with a price target of $36.00.
Needham analyst says, "We attended Solarwinds’ analyst day and have decided to change our course after being proven wrong by a management team which has held operating margins together through acquisitions, new product introduction, and international expansion. Another key point we have been impressed with is SWI’s ability to “protect” maintenance sales and avoid discounting of maintenance – SWI’s maintenance renewal rate is high (mid 90s%) and is also high-margin, which we believe can offset any future dilutive acquisitions the company may execute; this point is one which just recently crystallized for us, as we looked back at a strong CY11 where SWI did at least two dilutive acquisitions but was able to maintain a 50% operating margin. With analyst day’s introduction of CY12 guidance above consensus, combined with a CY12 plan to work on “existing markets” (read: focus on what we’re already in), and 10% sales heads focused on “crossselling”, we believe CY12 guidance of 50% opmgn and +23-27% revenue growth may be conservative."
For an analyst ratings summary and ratings history on SolarWinds click here. For more ratings news on SolarWinds click here.
Shares of SolarWinds closed at $29.49 yesterday.
Needham analyst says, "We attended Solarwinds’ analyst day and have decided to change our course after being proven wrong by a management team which has held operating margins together through acquisitions, new product introduction, and international expansion. Another key point we have been impressed with is SWI’s ability to “protect” maintenance sales and avoid discounting of maintenance – SWI’s maintenance renewal rate is high (mid 90s%) and is also high-margin, which we believe can offset any future dilutive acquisitions the company may execute; this point is one which just recently crystallized for us, as we looked back at a strong CY11 where SWI did at least two dilutive acquisitions but was able to maintain a 50% operating margin. With analyst day’s introduction of CY12 guidance above consensus, combined with a CY12 plan to work on “existing markets” (read: focus on what we’re already in), and 10% sales heads focused on “crossselling”, we believe CY12 guidance of 50% opmgn and +23-27% revenue growth may be conservative."
For an analyst ratings summary and ratings history on SolarWinds click here. For more ratings news on SolarWinds click here.
Shares of SolarWinds closed at $29.49 yesterday.
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