Morgan Stanley Remains on the Sidelines Waiting for Intralinks to Stabilize

In a report published Wednesday, Morgan Stanley analyst Jennifer Swanson Lowe remained Not Rated on Intralinks IL. In the report, Morgan Stanley noted, “Q4 revenue of $62.7M, up 9% YoY, came in well ahead of us at $58.4M and consensus of $58.2M, as strength in Intralinks' core M&A business continues to drive upside while the Enterprise business showed slight growth against easier compares. However, op. income of $3.1M (5% margins) came in slightly below us at $3.4M as Intralinks continues to invest in sales & marketing to drive future growth. "Overall, FY13 showed a stabilization in Intralinks business with 8.2% YoY growth an improvement from 1.7% in CY12. With new products in place and continued investments in sales & marketing, we expect 2014 to show further stabilization, with potential for upside if M&A activity remains healthy. VIA should help Enterprise growth improve over time but the impact in CY14 is likely to be modest, although bookings growth will be the leading indicator to watch here." Intralinks closed on Tuesday at $11.03.