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Stifel Maintains on ShoreTel

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In a report published Friday, Stifel analyst Sanjiv Wadhwani maintained a Buy rating on ShoreTel (NASDAQ: SHOR), raising its price target from $7.50 to $12.00.

According to the report, the price target raise is based on 1.8x EV/2014E sales.

The report further asserted that SHOR is highlighted as a key participant in the hosted voice market, with 25% of the company's revenues coming from that market. The global market penetration for hosted voice is rather low at 14% with Synergy predicting global hosted voice market will grow at 41% CAGR over 2013-2017.

“For ShoreTel, key drivers for 2014 will be the continued traction and growth of the company's cloud-based hosted voice business,” the report said. “The hosted voice model typically sees a break-even profit level after two years, with the typical customer staying on for 7-10 years. After year two, margins from cloud customers are fairly high.”

Some risks to SHOR include a decline in premise business and potential price competition from low-end, low-cost UCaaS competitors like 8x8 and RingCentral, which attempt moving up-market into SHOR's mid-market enterprise space.

SHOR closed Thursday at $9.25.

Latest Ratings for SHOR

DateFirmActionFromTo
Aug 2015Canaccord GenuityInitiates Coverage onBuy
Jun 2015Lake StreetInitiates Coverage onBuy
Sep 2014SunTrust Robinson HumphreyUpgradesNeutralBuy

View More Analyst Ratings for SHOR
View the Latest Analyst Ratings

Posted-In: Sanjiv Wadhwani StifelAnalyst Color Reiteration Analyst Ratings

 

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