Needham Keeps Strong Buy on Cognos

Analyst Charlie Chen says the software maker's quarterly earnings and revenue beat his estimates

Needham upgraded its estimates and maintains the strong buy rating on Cognos (COGN ).

Analyst Charlie Chen says first-quarter EPS and revenue are ahead of his and the Street estimates. He noted firmer license revenue, as strong execution and a strong product cycle are driving accelerating organic license growth. Chen believes 9% first-quarter organic license growth shows market share gains.

Chen says positioning themes -- corporate performance management for integrated planning, monitoring, reporting, and enterprise reporting standardization -- is aiding sales momentum while key competitor Business Objects is distracted with the integration of recently-acquired Crystal Decisions. He upped the $1.19 fiscal 2005 (Feb) EPS estimate to $1.24, and upped the $1.40 fiscal 2006 estimate to $1.42. He has a $40 target.

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