UPDATE: FBN Securities Initiates Actuate at Outperform on Upside Outlook

FBN Securities initiated coverage on Actuate

with an Outperform rating and a $9 price target. FBN Securities noted, "Investor expectations are much lower than the upside suggested by management. As noted above, Actuate is currently experiencing very strong license growth, approaching 30%. Actuate management believes that a F2011-F2016 license CAGR of 30-40% and a services CAGR of 6-10% is possible. This works out to a blended revenue CAGR of 13-17%, which is above our estimate of closer to 10%. Management also believes that it could obtain a NG operating margin of 35-40% in F2016; this is also much higher than our 23% estimate. Therefore, if management is even approximately correct, there would be ample upside in the stock." Actuate closed at $6.53 on Wednesday.