Needham initiated coverage on Talk America (TALK ) with buy.
Analyst Vik Grover says the company has laid the foundation for a strong nationwide carrier that offers bundled local, long-distance, and value-added voice services to consumers and small businesses with less than four lines. He says recent regulatory decisions allow Talk America to migrate into the local market by leasing local infrastructure from the Baby Bells.
Over time, Grover expects non-facilities-based carriers like Talk America to evolve businesses toward company-owned facilities. He sees Talk America becoming a larger company, shifting from a consumer marketing story into a switch-based carrier. He sees $1.12 2003 earnings per share, and $1.37 for 2004. He set a $20 target.