From Standard & Poor's Equity ResearchCARIS CUTS NETAPP TO AVERAGE FROM BUY
Caris analyst Shebly Seyrafi says NetApp's (NTAP) $938 million fourth quarter revenue is lower than his $945 million estimate, but higher than $936.5 million consensus forecast; $0.38 non-GAAP EPS is above his $0.37 estimate and $0.36 consensus.
Seyrafi downgrades the stock on disappointing first quarter guidance for revenue down 7%-10% quarter-to-quarter; he notes $0.20-$0.23 first quarter non-GAAP EPS guidance is below $0.27 consensus on increased investment in headcount, some weak balance sheet metrics (especially A/R, which grew 26% quarter-to-quarter). He is also concerned product sales grew only 4% quarter-to-quarter, Intercontinental (mostly Asia) revenue fell 18% quarter-to-quarter, headcount growth is quite high, and inventory grew 17% quarter-to-quarter.
He cuts $1.37 fiscal year 2009 (April) non-GAAP EPS estimate to $1.32, $1.54 fiscal year 2010 to $1.49 and 28 price target to 25.
JEFFERIES UPGRADES SALESFORCE.COM TO BUY FROM HOLD
Jefferies analyst Ross MacMillan says salesforce.com (CRM) beat first quarter sales and EPS consensus forecast, and notes sales rose more than 50% year-over-year for the second consecutive quarter.
MacMillan says the company is moving from being a market leader in on-demand customer relationship management (CRM) to a major provider of cloud compute infrastructure; meaning the company is opening up its platform to let customers and other third parties write their own apps on the company's platform. He still believes the company has considerable growth prospects in core CRM, and that international remains a large opportunity, but thinks the company's cloud computing opportunity could be many times the size of the CRM market.
He sees $0.33 fiscal year 2009 (January) EPS, $0.66 fiscal year 2010. He raises 49 price target to 77.
GOLDMAN ADDS AKAMAI TECHNOLOGIES TO AMERICAS INVESTMENT SELL LIST
Goldman Sachs analyst Derek Bingham says Akamai Technologies (AKAM) stock's recent strength now has it above his 33 12-month price target (cut from 35).
Based on competitive and pricing concerns, he trims $1.72 2008 EPS estimate to $1.69, $2.06 2009 to $2.01 (excluding employee stock options--ESOs); including ESOs, he cuts $1.35 2008 EPS estimate to $1.32, and $1.64 2009 to $1.59.
Bingham notes that beyond valuation, he's also concerned about intensifying competition as private entrants proliferate and selected large network operators begin to eye space. He says while portions of AKAM's customer base is likely relatively immune from competitive pressures, he believes a majority will be able to put increasing pressure on the company as contracts come up for renewal.