Analyst Actions: Fair Isaac, Buffalo Wild Wings, Equinix
CITIGROUP UPGRADES FAIR ISAAC TO BUY FROM HOLD
Citigroup analyst Tony Wible says while expectations appeared low, Fair Isaac (FIC) managed to post strong fourth quarter results. He notes key drivers were: 1) bookings well ahead of guidance, 2) stronger-than-expected Scoring revenues; and 3) bullish 2008 guidance.
He points out that the company posted its second consecutive quarter of sequential bookings improvements, it appears to be gaining traction with its strategy of using software, and consulting contracts as an entry point into new business. Also, while Scoring results were strong, increased competition pressures lead to more conservative fiscal year 2008 guidance. Given improved outlook he upgrades the stock and and raises target price to $44.
RBC CAPITAL LOWERS ESTIMATES, TARGET FOR BUFFALO WILD WINGS
RBC Capital analyst Larry Miller says Buffalo Wild Wings (BWLD) comps remain well above peers but slowed more than expected in October to 4.0% at company stores (2.5% franchise) against difficult comparisons. He also notes BWLD should experience higher than expected pre-opening costs (more openings than he expected), higher food costs.
Miller cuts $0.38 fourth quarter EPS estimate to $0.36, $1.18 2007 EPS estimate to $1.15, and $1.47 for 2008 to $1.43. He sees difficult sales, EPS comps limiting EPS upside, at least in the near term, keeping him at sector perform. He cuts $43 12-month target to $40.
CIBC WORLD UPGRADES EQUINIX
Analyst Srinivas Anantha says he's upgrading Equinix (EQIX) to sector outperform from sector perform based on its improving business fundamentals, strong growth profile and consistent execution. He notes he's always been impressed with EQIX's neutral/horizontal business model, but a premium valuation kept him neutral on the stock.
Recently, however, the addition of capacity in existing markets and expansion into Europe have driven EQIX's revenue and EBITDA growth above his prior estimates. Along with upgrade, he sets a $125 target price. He notes, as of yesterday's close, EQIX was trading at a relatively attractive 18 times estimated 2008 EBITDA and 14 times 2009 estimated EBITDA.