Strong Buy recommendation

Nordeas analys på andra kvartalet lyder så här:

Q2 2007 results: 85% revenue growth, as
expected
Net Insight’s Q2 report was in line with our expectations. Revenue grew
by 85% and the gross profit margin reached 70.5%. We leave our
estimates and target price of SEK 8 per share unchanged, and reiterate
our Strong Buy rating.
• Net Insight reported revenue of SEK 55.5m and EBIT of SEK 3.3m,
largely in line with our expectations. The gross profit margin came in
at 70.7%, slightly above our estimate of 70%. Cash flow was a little
negative during the quarter compared with our forecast of slightly
positive cash flow because of increased inventories. The company
made somewhat larger investments in product development than we
had anticipated.
• Management states that all of the geographical areas and the three
segments – DTT, Media Networks and IPTV/CATC – are doing well
and that the build-up of inventory is temporary, the result of specific
client projects.
• We leave our estimates unchanged. We still view Net Insight as a
very likely acquisition target. It clearly has a good range in a strong
growth segment of the network equipment market and it is winning
further deals ahead of major players like Cisco and Alcatel.
• Using a WACC of 11.5%, our DCF calculation yields a value of SEK
8.4 per share. We maintain our target price of SEK 8 per share and
reiterate our Strong Buy recommendation.

Säger bara Strong Buy.