August 11, 2008
Analyst Actions: Anadigics, Isis Pharmaceuticals, The Knot
MORGAN KEEGAN CUTS ANADIGICS TO MARKET PERFORM FROM OUTPERFORM
Morgan Keegan analyst Harsh Kumar says Anadigics (ANAD) third quarter shortfall is a result of lower than expected demand for the company's wireless customers. He says he is extremely disappointed with financial performance given that the company had given guidance that they appeared to be comfortable with just two weeks ago.This significant downtick in business makes him very skeptical. Kumar says he is forced to believe that the company is losing a tremendous amount of market share, given commentary about a substantial increase in business for some of its largest competitors in the September quarter.
Even though the stock appears cheap, he prefers to move to the sidelines given that he is not comfortable with its financial model at the present time.
NEEDHAM UPS ISIS PHARMA TO BUY FROM HOLD
Needham analyst Mark Monane says yesterday Isis Pharmaceuticals (ISIS) reported second quarter results [highlighted by solid cash position of $537 million], reviewed progress of mipomersen [including revised June 2008 GENZ collaboration with planned initiation of 3 more Phase 3 trials this year], updated partner progress [OncoGenex OGX-011 to enter Phase 3 trial, Antisense Therapeutics/Teva VLA-4 inhibitor with positive Phase 2 data], and updated expected events for second half of 2008 and early 2009.
In he near term, Monane thinks upcoming milestones in these programs represent upside opportunity for the stock. In the long-term, he sees substantial commercial potential in IBIS antisense platform.
Heas a $22 target price on the stock.
DEUTSCHE BANK CUTS THE KNOT TO HOLD FROM BUY
Deutsche Bank analyst Jeetil Patel says The Knot's (KNOT) $28.7 million second quarter revenues missed his $31 million estimate and $0.09 pro forma EPS missed his $0.11. He says the shortfall is due to weakness across most business lines.
Patel notes ad challenges come on two fronts: national ads are seeing budget cuts and cancellations, while local ads continue to experience high attrition rates. He says profitability expansion continues to lag on extended reinvestment, which includes recent Bump Media acquisition. He says business execution has been spotty in recent quarters, with weakness in multiple segments, including registry and publishing.
He cuts $111.6 million 2008 revenue estimate to $104.3 million and $0.36 PF EPS to $0.21; $129 million 2009 revenue estimate to $107.7 million and $0.52 EPS to $0.31. He also lowers $16 price target to $9.