Aug. 19 (Bloomberg) -- Kit Digital Inc. stock was upgraded to “hold” from “sell” at Komercni Banka AS, which cited improved second-quarter earnings and said the provider of online video software has enough cash for further expansion.
Analyst Josef Nemy at the Czech unit of Societe Generale SA raised his 12-month price estimate for Kit’s New York-traded stock to $10.50 from $9 in a report to clients today.
Revenue jumped an annual 120 percent to $23.1 million in the second quarter, the company said Aug. 16, beating all analyst estimates in a Bloomberg survey. Net loss shrank to $342,000 from $1.6 million a year earlier, Kit said in a statement.
“The second-quarter 2010 results have shown some signs of improvement in operating profitability,” Nemy wrote. “After several equity offerings, the company holds a large amount of cash” which “will enable Kit to acquire further companies and boost its market share. In the long term, Kit might also become an attractive takeover target.”
Komercni said in the same note it is discontinuing coverage of Kit Digital because its shares represented only 0.05 percent of the traded volumes on the Prague Stock Exchange in the first six months of its dual listing on Jan. 25.
Kit fell 5.8 percent to $8.94 in Nasdaq Stock Market trading as of 11:20 a.m. in New York, snapping a three day rally. In Prague, it gained 1.4 percent to close at 182 koruna.
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