Oppenheimer Maintains Outperform Rating, $21 PT for RigNet

In a quarterly update published earlier today, Oppenheimer Holdings maintained its Outperform rating and $21.00 price target for RigNet Inc. RNET. Oppenheimer went on to say “RigNet reported 1Q12 results slightly above our estimates, with revenues and ARPU above our forecasts on strong demand for bandwidth, value-added services and secondary-customer penetration (all in line with our thesis on the name). We maintain our EPS estimates but raise our cap-ex forecast on the announced European notice for three drill ships. We see further upside to our estimates from Pride rigs potentially served by RNET and margin benefits from bulk/term discounts on satellite capacity. We reaffirm our Outperform rating. Key risks remain low liquidity, high taxes, elevated cap-ex and low natural gas prices. These risks are offset by strong 20% growth, expanding margins and a very inexpensive 5x 2013E EBITDA multiple.” RigNet Inc. closed yesterday at $15.85.