From Standard & Poor's Equity Research
Baird upgraded RightNow Technologies (RNOW) to outperform from neutral, noting that the stock price declined 20% recently since the company reported its second quarter results.
Analyst David Koning believes that on-demand software is still in the early stages of growth, and that the company is well positioned within the industry. He believes the recent sell-off is primarily due to deceleration of bookings growth to 30% (from 71% in the first quarter) - he also believes management remains highly confident in 20% to 50% bookings growth for 2006. At Friday's closing price, he considered valuation to be compelling given that the company is in high-growth mode. He has a $17 stock price target, which reflects 22 times his 2007 FCF per share estimate of 76 cents.