JMP: AVG Technologies Is Our 'Top Idea,' Now Worth $47/Share
In a report published Thursday, JMP Securities analyst Patrick Walravens maintained a Market Outperform rating on AVG Technologies NV (NYSE: AVG), while raising the price target from $33 to $47.
AVG is a global anti-virus and security software company with approximately 143 million active users in 170 countries. The company's Location Lab product is expected to boost the company's customer base via its partnerships with varied mobile operators.
"We expect AVG to begin to monetize Zen using a subscription model and think it could drive upside to the financial model. About eight months ago, AVG began to apply the Zen user interface to each new download, now the key is to monetize it based on certain triggers, such as the number of devices covered. A key milestone in this process will be the completion of a subscription billing engine that AVG has been working on and which may be complete in 3Q15," analyst Patrik Walravens mentioned.
In the report JMP Securities noted, "We believe consensus estimates for 2016 and 2017 are too low at 16% and 10% revenue growth versus our estimates of 20% and 15%, respectively, and versus management's guidance of 20% in 2016."
AVG has a highly profitable business model with relatively low competition since Symantec Corp (NASDAQ: SYMC) (rated: Market Outperform, PT $30) is deemphasizing the customer side of its business. The company's reliance on Google Inc (NASDAQ: GOOGL) for its internet traffic and platform revenue is a risk area.
Latest Ratings for AVG
|Aug 2016||JMP Securities||Downgrades||Market Outperform||Market Perform|
|Feb 2016||JP Morgan||Maintains||Neutral|
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