Friedman Billings Cuts Ness Technologies to Market Perform
Friedman Billings downgraded Ness Technologies (NSTC) to market perform from outperform, citing the information technology services provider's recent acquisition of the privately held Innova Solutions.
Analyst Chris Penny noted that the company also releases its quarterly earnings on Thursday. The analyst believes that Ness Technologies is well positioned to benefit from IT outsourcing and remains a strong player in the industry. However, Penny notes that the recent Innova acquisition marks the company's fourth purchase in less than a year. Penny believes that risk exists for the company to achieve the analysts' prior 2006 earnings per share (EPS) forecast of 87 cents and therefore cuts the estimate to 75 cents. Penny adds that three major contracts that began in the fourth quarter present additional execution risk.