CIBC World Keeps 'Buy' on Cheap Tickets

Analyst Paul Keung thinks the discount air fare company can achieve target growth

CIBC World reiterates buy on Cheap Tickets (CTIX ).

Analyst Paul Keung says Q2 results are in line with the company's June 26 preannouncement. He notes revenues were hurt by technology issues that surfaced during the quarter, however, gross bookings rose 20%. He says during a conference call, the company cut its Q3 guidance due to flow-through of operational issues into July.

Keung cut the $0.25 Q3 EPS estimate to $0.18, excluding a $2.5 million charge for store closings. Based on talks with the airlines, he believes the company is uniquely positioned to benefit from a rise in "call center only" fares. Also, he thinks recent steps taken by management should allow the company to achieve growth. He has a $19 target.

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