CSFB: Strong Buy for Wind River

Analyst Erach Desai notes the software firm's stronger margins and lower share count

CS First Boston reiterated its strong buy on shares of Wind River (WIND ).

Analyst Erach Desai says Q4 EPS were a penny above consensus and $0.02 above his estimate. He tied the upside to a better growth margin, a higher operating margin and a lower share count. Desai maintained his $570 million fiscal 2002 revenue estimate but cut his $0.75 fiscal 2002 EPS to $0.68 on an expected operating margin reduction. He cites concerns about an inability to consistently predict services revenue, and the vulnerability of royalties in fiscal 2002. He has a $55 price target. While the target may be aggressive given the present market conditions, Desai believes in the company's long-term franchise value.

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