Wedbush Securities Has Positive Outlook on Demandware Ahead of 4Q14 Results

In a report published Tuesday, Wedbush Securities analyst Shyam Patil reiterated an Outperform rating and $70.00 price target on Demandware (NYSE: DWRE).In the report, Wedbush Securities noted, "We expect Demandware to report a solid quarter and would note that the company has exceeded expectations by an average of ~8% for revenue every quarter since becoming public (we view revenue growth as the key P&L metric). We are modeling 4Q revenue of $48.5 million (37% y/y vs. 56% in 3Q), in line with consensus $48.7 million. We forecast subscription revenue of $46.5 million (39% y/y vs. 52% y/y in 3Q) and services revenue of $2.0 million (- 3% y/y vs.+106% y/y in 3Q). We are modeling non-GAAP EPS of $0.13 vs. consensus of $0.14. Additionally, given that Demandware has not historically engaged in currency hedging, FX could be a mild headwind as ~40% of revenue is international. We also remain comfortable with our 2015 organic revenue/EPS of $208.7 million/$0.15 vs. consensus $218.3 million/$0.17, though acknowledge that FX could be roughly a ~5 point headwind. The recent Tomax acquisition (not in our estimates, but expected to have closed in January) is expected to add $22-24 million in revenue and negative non-GAAP net income of ~$3.5-4.5 million in 2015."Demandware closed on Friday at $55.99.