Wedbush Says Outerwall Remains A Value Stock

is scheduled to report its fourth-quarter results after market close on February 5. Michael Pachter of Wedbush commented in a note on Thursday that the company is expected to report revenue of $605 million and earn $2.24 per share in the quarter, while the consensus estimate stands of $600 million in revenue on earnings of $2.37 per share. Pacther notes that the firm's recently narrowed fourth-quarter guidance is an indication that the business is “stable” and that shares remain a “value stock.” “Should management once again decide that it is prudent to return 75 percent to 100 percent of free cash flow to investors, it is likely that Outerwall's share count will decrease dramatically, and its cash flow and earnings per share should increase correspondingly,” Pachter wrote. “The company is positioned to benefit from recent price increases, better cost control, the elimination of money losing businesses and improvements in its ecoATM profitability.” Looking forward to fiscal 2015, Pachter expects a “favorable” update to prior preliminary guidance as management has been “exceedingly conservative.” Shares are Outperform rated with an $82 price target.