Robertson Stephens Keeps Market Perform on

Analyst Dane Lewis is concerned about the stock's valuation (MCAF ) posted fourth-quarter EPS of $0.09. Robertson Stephens maintained its market perform rating on the stock.

Analyst Dane Lewis says he was impressed with the company's business model and its execution in the consumer security market. Lewis says McAfee.coms's strengths include a strong, visible brand, a highly visible subscription revenue model, efficient management execution, and a growing demand for PC and Internet security within an underpenetrated target market: consumers. Despite these strengths, Lewis is concerned about valuation. The analyst says the $23 12-month price target reflects 50 times his new $0.42 2003 EPS estimate, plus $2 cash per share. He adds that while ad revenue grew to 11% of total revenue in the fourth quarter from 9% in the third, he expects this revenue segment to decline to 5% of total revenues over coming quarters.

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