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Hi Leute, hier ein Update von Kaufman Bros., dem bisher leider einzigen Analysten, der Talk begleitet. Super Ausblick, oder? Ich finde deren EPS-Schätzung von 0,35 $ für 2002 immer noch zu konservativ. Ich gehe von 0,45 $ aus. Mal sehen. Ach übrigens, Kaufman hat nur ein BUY, bei denen gibt es kein strong buy rating. Nur zur Info. TALK AMERICA HOLDINGS, INC. (TALK+ $3.45) Vik Grover, CFA, 212.292.8123 Rating: BUY Price Target: $6 ONE SMALL STEP FOR TALK, ONE GIANT STEP FOR LOCAL COMPETITION -We see a series of positive catalysts for Talk America that should drive the shares higher this summer. -Today, the company met with the NASD regarding its National Market (NASDAQ NMS) listing. We believe the company already meets the requirements of keeping its listing except for a $3 stock price, which was achieved recently heading into today`s appeal. We believe the NASD has a 14-day turnaround window relative to this appeal, which should enable Talk America to meet listing requirements by maintaining a stock price over $3 for 10 consecutive days. TALK shares have closed over $3 for three days already, so by the time the NASD responds to this issue the listing problem should become a moot point, in our view. -On Monday, July 1, RUSSELL is likely to add TALK to its RUSSELL 2000 index, which we believe could lead to substantial buying of TALK common shares as index funds are forced to initiate positions in the stock. RUSSELL added the company to its candidate list for additions to its index earlier this month. -On August 6, the company expects to report strong 2Q02 results. Talk America has already pre-announced positive 2Q02 results at the high end of expectations and raised guidance for the period. The company also expects to raise guidance for the full year when it reports. We see upside to our 2Q02, 2002 and 2003 estimates and believe full-year EPS could hit $0.35 in 2002 and $0.50-0.60 in 2003, underscoring the substantial operating leverage in the company`s model. Specifically, we estimate 2Q02 revenues, EBITDA and EPS at $76.2 million ($38.3 million local, up 8% QoQ); +$11.6 million (below guidance of $12-14 million), and +$0.05, respectively. -We estimate 2002 free cash flow at $40.2 million and 2003 free cash flow at $53.9 million, meaning that TALK is still inexpensive at an EV of roughly $400 million or 8x free cash flow and facing double-digit bottom line growth for the next few years. Note that because of the low capex requirements of UNE-P local service delivery and the company`s low net interest of roughly $10 million, earnings basically equal free cash flow. We see 10-20% upside to our free cash flow estimates for the company due to better billed local lines, better margins, lower churn, lower subscriber acquisition costs, and improved balance sheet strength. -In 3Q02, we anticipate the company will officially launch services in California. It is our understanding through discussions with other industry players, including MCI Group (MCITE+ $1.68, HOLD) and Z-Tel (ZTEL $0.63), that the state PUC is working on eliminating/reducing non-recurring, non-mechanized charges assessed by the RBOC for cutting over UNE-P local customers. By reducing these fees from $50-60 per sub down to a mechanized fee of $0.25-0.50, we believe the PUC could crack open the California market to UNE-P local competitors, a major opportunity for Talk America that would almost double its addressable customer base given California`s substantial scope and scale. Entry into Florida could come later this year, another substantial catalyst. -Net/net: We believe that TALK remains one of the only telecom stocks that works. The company is about to post its first quarter of sequential growth in 2Q02 and should raise guidance substantially, according to management`s pre-release this month. Further, we believe (1) the NASDAQ NMS listing will soon become moot due to trading levels above $3 eliminating investor concerns over liquidity; (2) that the addition to the RUSSELL 2000 next week could drive shares higher due to index fund purchases; (3) that there is upside to our current estimates of 10-20%; and (4) that California should provide a major 3Q02 catalyst to the stock due to an improved regulatory climate for local competitors. We reiterate our BUY recommendation and $6 goal. |
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| aus der Diskussion: | Talk America |
| Autor (Datum des Eintrages): | OhneMandeln (27.06.02 21:00:04) |
| Beitrag: | 9 von 216 (ID:6746157) |
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