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Pandora Media

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P : NYSE : US$16.57
BUY 
Target: US$18.00

COMPANY DESCRIPTION:
Pandora radio is the market leader in personalized Internet-based radio listening in the US. The company uses its proprietary algorithms as part of the Music Genome Project to generate playlists for users that are personalized and cater to the tastes of individual users.

Summary
While competitive developments continue, we believe fundamentals at Pandora remain strong heading into Q1 earnings next week. Our proprietary analysis points to a growing audio ad load (driven by robust adoption of the STRATA integration) and higher quality of advertisers
(big national brands). In addition, the temporary 40-hour listener cap on mobile appears poised to dampen content costs. As such, several
positives are coming to a head at once. Given the timing, Q1 impact is hard to gauge but likely positive, while impact to Q2 and beyond should
be more positive. Our best estimate is that guidance should be somewhat bullish without being irresponsibly aggressive.
Key points
 Our proprietary research (admittedly a small sample) indicates an audio ad load that has gone from 1.40 minutes per hour a month ago to 1.75 minutes currently. We believe this is being driven by sales force ramp, Triton measurement, and STRATA integration. This should drive higher RPMs.
 We also believe subscription revenue and content costs could both show improvement in Q1 from the 40-hour mobile cap, with more impact in Q2 and beyond.
 We believe Google’s newly announced $10/month “All Access” subscription service should have only a moderate competitive impact on Pandora’s listener base, which clearly likes free stuff.
Valuation
Our $18 target is unchanged and is based on 32x our F2017 EPS estimate of $0.90, discounted to present at 12.1%.

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by jackbassteam on May 17, 2013  •  Permalink
Posted in Tech stocks, Telecommunications, software
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Posted by jackbassteam on May 17, 2013

http://amp2012.com/2013/05/17/pandora-media/

Aspen Technology BUY  Target: US$35.00

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AZPN : NASDAQ : US$30.48
BUY 
Target: US$35.00

COMPANY DESCRIPTION:
Aspen provides software and services to process-intensive industries such as oil & gas, petroleum, chemicals and pharmaceuticals. The company’s products aid in process design, production planning, economic evaluation and simulation across three core areas – engineering, plant operations and supply chain management.
All amounts in US$ unless otherwise noted.

Investment thesis


We believe Aspen’s business momentum is intact, estimates are amply conservative and the stock’s FCF multiple is about right. We do not believe the forthcoming retirement of CEO Mark Fusco presages trouble. Therefore, we expect AZPN shares to advance in line with cash flow growth that we see averaging in the mid-teens over the next several quarters. A near-term positive catalyst is likely to be AZPN’s User Conference and Analyst Day on Monday, May 6th. Reiterate BUY.
Another solid quarter. LTCV growth of 12.9% (to $1.58B) and FCF of $58M were both nicely ahead of our 12.5% and $52M estimates. Annual spend growth of 11% was below our 12.3% estimate, but was impacted by 1.5% due to a Venezuelan renewal that hit just after the quarter closed. For those tracking less relevant metrics like revenues and EPS, those were both nicely ahead of estimates as well – revenues of $79.4M compared to our $73.0M estimate and EPS of $0.13 beat our $0.05.
Outlook: FCF and LTCV ranges inched higher again, likely still conservative. AZPN increased its F2013 FCF target by $10M to $130M and narrowed LTCV growth to 10-11%. With one quarter to go in the fiscal year, we believe both targets are conservative and our estimates are slightly ahead of the guidance. We expect to get more color on the firm’s long- and intermediate-term targets at Monday’s analyst day in Boston.
Valuation and price target. We are increasing our price target by $1 to $35, which is based on 20x our C2014 FCF/share estimate of $1.61 plus roughly $3.00 in prospective net cash per share.

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by jackbassteam on May 2, 2013  •  Permalink
Posted in software
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Posted by jackbassteam on May 2, 2013

http://amp2012.com/2013/05/02/aspen-technology-buy-%ef%80%a0-target-us35-00/

Roper Industries

Roper Industries

Roper Industries (Photo credit: Wikipedia)

ROP : NYSE : US$118.68
HOLD 
Target: US$128.00

COMPANY DESCRIPTION:
Roper is a diversified growth company focused on the design, manufacturing and distribution of products and software for segments of multiple specialty end markets including energy, radio frequency (RF) technology, water, security, research/medical and education, among others.

Investment recommendation


Management execution is impressive, as margin expansion and cash generation continue to outperform. Recent investments (Sunquest, MHA)
look to drive even stronger returns, even as ’13 growth stays more H2 weighted. While we find a premium warranted given a track record of
value creation, we find nearer-term risk/reward more balanced.
Investment highlights
 Record order flow (particular strength in RF) drives good visibility (b2b 1.07, backlog >$1B), while comps get much easier in H2/13.
The accretive MHA acquisition is expected to close May 1, as next major M&A investment likely materializes in ’14.
Margin expansion continues (across all segments), with consolidated GM +240bps y/y to 57.4%. FCF also stays impressive ($160M, 128%
NI conversion), with full-year OCF expected >$800M. Guidance gets adjusted for MHA (organic growth unchanged), though more backend
loaded vs. the Street.
 Our revenue/adjusted EPS estimates update to account for the addition of MHA as follows: F2013E to $$3.31B/$5.83 (from $3.29B/$5.72); F2014E to $3.58B/$6.45 (from $3.46B/$6.30).
Valuation
Our 12-month target of $128 equates to ~11.5x our 2014 adjusted EBITDA estimate of $1.26B.
Risks
M&A integration, competition, macro conditions, FX fluctuations,
commodity costs, and leadership succession.

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by jackbassteam on May 1, 2013  •  Permalink
Posted in software, Tech stocks
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Posted by jackbassteam on May 1, 2013

http://amp2012.com/2013/05/01/roper-industries/

Demandware

Um playmobil e um Domo-kun

Um playmobil e um Domo-kun (Photo credit: CesarCardoso)

DWRE : NYSE : US$25.32
BUY 
Target: US$36.00

COMPANY DESCRIPTION:
Demandware provides an enterprise-class, cloud platform that enables brands to build and manage eCommerce sites for omni-channel commerce. The software is multi-tenant, single instance and the platform has an extensive integrated partner network (LINK).

Investment thesis


DWRE shares have become the punching bag of aggressive competitive commentary and uncoordinated venture investor distributions. Execution can overcome skepticism, but distributions now appear likely to roil the stock until completed or an organized offering materializes. Meanwhile, we believe it is likely that investors will receive positive sell-side commentary later this week following DWRE’s analyst day at the firm’s user conference. Reiterate BUY.
 Analyst event this Thursday. DWRE plans to assemble a customer panel highlighting success with Brooks Brothers, PacSun, Tory Burch and Jones New York in addition to the typical analyst presentations. Investors should expect a slew of favorable commentary at the end of this week as the event wraps.
 In the end, consistent execution is the cure-all. Ratcheted up competitive commentary and ungainly venture distributions can cause short-term share price dislocation. We continue to fall back on the fact that DWRE is attacking a quite large addressable market riddled with legacy technology
vendors. We hold the notion that eventually this will materialize in results.
 Meanwhile, conservative estimates set up well. It’s likely that services revenue and operating cost estimates set up for 2013 upside surprises. In
addition, we believe the optics of accelerating subscription growth in 2014 should enable DWRE to at least maintain its forward trading multiple.
Valuation and price target
Our unchanged $36 price target is based on a 7.6x EV/revenue multiple applied to our 2014 revenue estimate of $134.0M plus roughly $90M in prospective net cash, which would put DWRE in line with other well-executing cloud applications vendors.

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by jackbassteam on April 3, 2013  •  Permalink
Posted in software, Tech stocks
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Posted by jackbassteam on April 3, 2013

http://amp2012.com/2013/04/03/demandware/

ANSYS : ANALYST DAY UPDATE

Français : Logo ANSYS.

Français : Logo ANSYS. (Photo credit: Wikipedia)

ANSS : NASDAQ : US$80.56
BUY 
Target: US$88.00

COMPANY DESCRIPTION:
Ansys sells engineering simulation software used to predict how product designs will operate and how manufacturing processes will behave in real-world environments. Building and testing virtual prototypes (versus physical) saves money, improves product quality, and speeds time to market. Founded in 1970, Ansys is headquartered in Canonsburg, PA

Investment thesis


We attended Ansys’ analyst day in Pittsburgh with about 60 other buy- and sellside analysts. The punch line remains the same: the firm has multiple vectors of growth, selling to customers at which simulation-driven design is gradually becoming the standard. Execution-wise, Ansys has one of the best track records in all of software. This is one of the primary reasons that we are comfortable keeping a BUY rating with shares trading at 22x C2014E EPS.

Longer term, for ANSS to see any material multiple expansion, the company will have to deliver organic revenue growth that accelerates from today’s high-single-digits, which we think is quite possible. That said, for investors looking for a high quality software name, ANSS is a sound choice, and we would certainly look to add to positions on any pull-back into the mid-$70s.
Analyst day highlights
 Three dimensions of growth: density, intensity, and the number of users. This means more modules as product complexity and accuracy demands increase; heightened levels of usage as confidence in results and innovation increases (high performance computing a key driver); and a larger pool of users as ease of use improves and cycle times shorten.
 Other updates. Management discussed the five key trends in simulation, highlights from the release of Ansys 14.5, updates on the Esterel and
Apache acquisitions, new sales initiatives to lower barriers to growth, and reiterated financial expectations.

Valuation and price target
We are increasing our target by $3 to $88, which is 23xour C2014 non-GAAP EPS estimate of $3.43 plus roughly $9.00 in prospective net cash per share.

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by jackbassteam on March 20, 2013  •  Permalink
Posted in software
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Posted by jackbassteam on March 20, 2013

http://amp2012.com/2013/03/20/ansys-analyst-day-update/

Oracle Upgrade

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ORCL : NASDAQ : US$35.43
BUY 
Target: US$42.00

COMPANY DESCRIPTION:
Oracle develops, licenses and services database and middleware software, applications software, and hardware systems worldwide. The firm is the world’s second largest application software firm, and a top five systems vendor.

Investment thesis


Investors have fretted about two years over declining revenue from Oracle’s hardware segment. We expect hardware revenues to begin to increase y-o-y in the next quarter or two, and for the balance of the firm’s business to be at least as good as we have forecast.

ORCL is valued at 11x our calendar 2013 EPS estimate. This is a bottom quartile valuation for the stock over the past 10 years. We believe the combination of these factors could lead to a 1 multiple point expansion, and when this is added to a projected 9-11% full year EPS growth with relatively easy comparisons in the May and August quarters, you could see ORCL advance 20% within a year. That’s a BUY, not a HOLD.
 Oracle reports next week: we expect middle- or upper-end-of-the-range results. We discuss our basis in detail later in this note, but the key point is that IT spending is perfectly fine and Oracle has a degree of sales momentum that should show up in next Wednesday’s print.
 Multiple expanders: forthcoming y-o-y revenue growth for hardware; competitive quiescence from the big platform firms; and the cool cloud
firms, near term, are unlikely to disrupt consensus growth projections. Oracle, as always, faces plenty of challenges. We simply do not believe they
will trip up the company in our 6-12 month positive view for the stock.
Valuation at a discount. ORCL trades at a 10-25% discount to a comparable large cap software firms IBM and SAP. We believe there is room for at least a 1.0 multiple point expansion. When you add 9-11% EPS growth to that figure, you get potential appreciation close to 20% within a year. That’s not bad for a very liquid, large cap stock.

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by jackbassteam on March 14, 2013  •  Permalink
Posted in software
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Posted by jackbassteam on March 14, 2013

http://amp2012.com/2013/03/14/oracle-upgrade/

Workday INCREASING TARGET TO $70. BUY

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WDAY : NYSE : US$61.63
BUY 
Target: US$70.00 

COMPANY DESCRIPTION:
Workday provides enterprise-scale, cloud applications that deliver the core functions for global customers to manage the human capital and financial resources of an organization. Solutions include: HCM, Financial Management, Payroll, Time Tracking, Procurement, Employee Expense Management, etc. Workday was founded by the former founders of PeopleSoft in 2005 and is headquartered in Pleasanton, CA

Investment thesis


We believe Workday is exceptionally well-positioned to disrupt and capture market share in several segments of the HR and broader ERP segments of the software industry. We suggest that investors own at least a starter position in WDAY and hope for an exogenous stock market shock to create an opportunity to fill out a full position. The company’s above-consensus Q4/13 results and management’s opinion of its calendar 2013 outlook reinforce our point of view.
Investment highlights
 Upside results across the board. WDAY reported Q4/13 revenues of $81.5M, which were $3.5M ahead of expectations and showed y-o-y
growth of 89% (105% on the subscription line). Calculated billings of $114.6M were up 48% y-o-y and beat our estimate by $6.6M. WDAY
generated positive operating cash flow for the quarter and the year versus our expectation for a material loss. Total backlog of contracted subscription revenue stood at $695M at the end of the fiscal year.
 Customer metrics. In F2013 WDAY added 150 new customers, including 50 in FQ4 alone. Notable Q4 customer wins included Nissan, Del Monte, Primark, SunTrust Banks, etc. The firm ended the year with 265 customers live with HCM solutions and 18 live on financials (of 50 total contracted).
Outlook

F2013 revenues guidance nicely ahead of consensus. Even taking into account WDAY’s efforts to push more of its implementation efforts to
services partners, the firm still provided a revenue outlook ahead of consensus (53-59% growth). Operating losses as a percent of revenues
should decline, and we expect billings to grow in the mid-40% range.

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by jackbassteam on March 11, 2013  •  Permalink
Posted in Cloud computing, Computers, software
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Posted by jackbassteam on March 11, 2013

http://amp2012.com/2013/03/11/workday-increasing-target-to-70-buy/

OmniVision – Rebound Ahead ?

Suffrage paraders: Mrs. McLennan, Mrs. Althea ...

Suffrage paraders: Mrs. McLennan, Mrs. Althea Taft, Mrs. Lew Bridges, Mrs. Burleson, Alberta Hill, Miss Ragsdale (LOC) (Photo credit: The Library of Congress)

OVTI

NASDAQ : US$13.61

Disappointing revenue guidance sent shares of Omnivision lower on Friday, but Canaccord Technology Analyst Bobby Burleson expects a rebound considering:

1) design wins are strong with Chinese smartphone OEMs, who are likely to grow global market share;

2) OVTI’s Apple (AAPL) smartphone prospects were already dim; and

3) valuation is compelling even with a number cut.

OVTI reported Q4 Revenues and EPS of $423.5 million and $0.56, compared to consensus estimates of $411 million/$0.41 and Burleson’s estimates of $410 million/$0.41. Management guided Q1/C13 (Apr) to be down sequentially 25% Q/Q at the mid-point, with revenues expected to be $300-330 million and EPS is expected to be $0.14-0.29. This compared to consensus estimates of $371 million/$0.32 and Burleson’s estimate of $375 million/$0.36.

On the weak guidance, Burleson revised his estimates for the company, now seeing Q1 revenue coming in at $315 million (down from $375
million) and full-year revenue being $1.415 billion (down from $1.587 billion). On the earnings front, he sees Q1 EPS of $020 (down from $0.36) and for the full year, he sees $1.62 (down from $1.24).

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by jackbassteam on March 5, 2013  •  Permalink
Posted in software, Tech stocks
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Posted by jackbassteam on March 5, 2013

http://amp2012.com/2013/03/05/omnivision-rebound-ahead/

RDA Microelectronics target $ 14

RDA logo

RDA logo (Photo credit: American Library Association Publishing)

RDA Microelectronics 
RDA : NASDAQ : US$11.48
BUY 
Target: US$14.00

COMPANY DESCRIPTION:
RDA Microelectronics designs, distributes, and markets RFIC, connectivity, and baseband solutions primarily to Chinese handset OEMs and ODMs. While RDA’s sales are primarily into the 2G market, RDA has introduced 3G power amplifier products and has EDGE and 3G baseband products on its 2013 roadmap to address the growing smartphone market.

Investment recommendation:

Following the acquisition of Coolsand, we believe sales of RDA baseband solutions have exceeded expectations and could provide modest upside to our Q4/12 estimates. Further, we believe RDA’s roadmap is on track to integrate its low-cost RF, Bluetooth, and potentially CMOS PA solutions with its baseband offerings, and this should expand RDA’s dollar content share per handset in the growing 800M+ unit Chinese OEM handset market.

In addition,  RDA  remains on track to sample EDGE and 3G baseband solutions in 2013 that should further bolster growth opportunities and improve gross margins in 2014. We maintain our BUY rating and $14 price target.
Investment highlights
December handset market survey and conversations with global distributors at CES indicated solid Q4/12 sales within the Chinese OEM handset market despite MediaTek’s Q4/12 sales announcement below their prior guidance, which we attribute to softer EDGE smartphone sales. In fact, our analysis indicates market share gains for RDA’s 2G baseband solutions, and we believe December baseband sales already surpassed the 2013 target
monthly unit run-rate of 13M units/month.
 Further, we believe sales of RDA’s higher-margin 8851 solution have surpassed 50% of baseband unit sales, and this should lead to modestly improved sequential gross margins despite the persistent pricing pressure in the 2G PA market. In addition, RDA is on track to sample EDGE baseband solutions in Q2/13, with first material sales in Q4/13 and WCDMA solutions exiting 2013.
 As a result of increased baseband sales assumptions, we are increasing our Q4/12 pro forma EPS estimate slightly from $0.35 to $0.36 and our 2013 estimate from $1.54 to $1.57.
Valuation:

Our $14 price target is based on shares trading at roughly 9x our 2013 pro forma EPS estimate.

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by jackbassteam on January 16, 2013  •  Permalink
Posted in Smartphones, software, Tech stocks, Telecommunications
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Posted by jackbassteam on January 16, 2013

http://amp2012.com/2013/01/16/rda-microelectronics-target-14/

Windows 8 Is A Flop : New York Times

Microsoft’s attempt to regain relevance and defend its core franchise with Windows 8 is off to a “shaky,” “tepid” start, says the New York Times.

 

Emmanuel Fromont, president of the America’s division of Acer, the number four PC maker, tells Nick Wingfield at the Times sales of Windows 8 PCs are coming in worse than expected. “It’s a slow start, there’s no question,” says Fromont.

Fromont isn’t the only person telling this story. At the end of November, Asus CFO David Chang said, “Demand for Windows 8 is not that good right now.”

And in the Times’ story, NPD analyst Stephen Baker is quoted as saying, “I think everybody would have hoped for a better start.” (NPD previously issued a negative report on the state of Windows 8.)

There are two reasons Windows 8 sales are slower than expected.

  • Windows 8 is a new experience with a steep learning curve that is intimidating some consumers.
  • Consumers are buying iPads, and delaying upgrades of their Windows-based PCs.

We didn’t reach out to Microsoft for comment on this story, but we know what it would say.

Microsoft would say it’s still too early to judge. It would say NPD’s data set is incomplete. It would say that it announced 40 million Windows 8 upgrades, which is better than it did with Windows 7 over a comparable period of time.

All of those are legitimated rebuttals. This is an ongoing story for Microsoft. But at first glance, it’s just not looking great for Microsoft.

Nederlands: Logo van Microsoft Windows 1.0, 2....

Nederlands: Logo van Microsoft Windows 1.0, 2.xx,3.xx, 95, 98, Me en 2000. (Photo credit: Wikipedia)

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by jackbassteam on December 23, 2012  •  Permalink
Posted in Computers, Microsoft, software
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Posted by jackbassteam on December 23, 2012

http://amp2012.com/2012/12/23/windows-8-is-a-flop-new-york-times/

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