Piper Jaffray Reiterates Its Overweight Rating On ValueVision Media
Piper Jaffray is reiterating its Overweight rating and $8 price target on ValueVision Media (NASDAQ: VVTV) and is updating its model to reflect EPS both on a fully-taxed and partially taxed basis. It also notes that management will be in New York Monday through Wednesday of next week to present at a competitor's conference and conduct separate investor meetings. Piper believes these meetings could serve as a catalyst for the shares as many investors are likely seeking high-potential small-cap ideas for 2011.
According to data from comScore, Holiday Season Online Retail Sales in 2010 increased 12% y/y, up from 3% growth in 2009. Given that VVTV generates about 40% of its sales from e-commerce, the success of this channel nationally gives Piper increased confidence in the company's ability to meet or exceed its estimates for FQ4.
Piper Jaffray continues to believe that VVTV is approaching an inflection point in its business and should achieve profitability in FY13. Growth in television distribution and a rising active customer penetration rate support our forecast of 15% to 20% annual revenue growth over the next three years, and the leverage of cable and satellite fees is expected to significantly expand EBITDA margins.
VVTV is trading lower at $5.72
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