UPDATE: Nomura Initiates Coverage on AVG Technologies Ahead of Multiple Positive Catalysts

In a report published Wednesday, Nomura analyst Frederick Grieb initiated coverage on AVG Technologies NV AVG with a Buy rating and $29.00 price target. In the report, Nomura noted, “We are initiating coverage of AVG Technologies (AVG) with a Buy rating and $29 target price, given our optimistic view of the company's ability to monetize its mobile installed base in the FY14 timeframe, its continued diversification in its platform search business, and the potential for revenue growth acceleration in 4Q13. AVG has begun diversifying its platform business away from Google to the point where, in 2Q13, 22% of platform revenues were from Yahoo! We expect the company to continue to diversify its platform revenue away from Google in the near term and to see both platform and subscription revenues reaccelerate in the second half of 2013, both of which are positive catalysts. AVG trades at just 8.4x our 2013 uFCF estimate, well below the security software group average of 16.3x. This represents a 12% uFCF yield, or a payback period of less than nine years.” AVG Technologies NV closed on Tuesday at $24.42.