USB Piper upgraded United Online (UNTD) to outperform from market perform.
Analyst Safa Rashtchy says United Online's subscriber growth is likely to exceed his current estimate and the company's guidance. Based on new data, he sees fiscal 2003 (ending in June) subscribers of at least 2.535 million, up from the previous 2.525 million estimate. He notes momentum in subscriber growth for a new high-speed product could provide additional upside.
Rashtchy raised the $14.9 million fiscal 2003 EBITDA estimate to $15.5 million, and upped the $79 million revenue estimate to $80.1 million. He also raised the 20 cents earnings per share estimate to 21 cents (GAAP).
Rashtchy thinks these new estimates are still conservative. He says United Online shares are at a discounted valuation relative to his universe of Internet-service provider stocks.