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UPDATE: D.A. Davidson Reiterates On EarthLink Following Solid Q3 Earnings


In a report published Wednesday, D.A. Davidson analyst James G. Moorman reiterated a Buy rating on EarthLink Holdings Corp. (NASDAQ: ELNK), and raised the price target from $4.50 to $5.00.

In the report, D.A. Davidson noted, “ELNK reported revenue of $297.7 million was $4-$5 million better than our estimate, but results included a one-time favorable revenue settlement of $6.8 million in transport. Business revenues were down 1.5% year-over-year (YoY) and Consumer revenues fell 10.7%. Normalizing for the revenue settlement in Q3, Business revenues declined 4.3% and customer churn increased slightly from 1.9% in Q2 to 2.0%. ELNK raised prices on small business last quarter and this accounted for the increase in churn. Consumer revenues exceeded our expectations and customer churn improved slightly to 2.2% compared to 2.3% in Q2. Adjusted EBITDA was $59.0 million, up 5.2% YoY and ahead of our $48.7 million estimate, and up from $50.9 million in Q2. ELNK had a $4.5 million income tax benefit for the reduction of reserves, resulting in a loss of $0.02. Excluding this one-time item, loss per share would have been $0.06.”

EarthLink closed on Tuesday at $4.09.

Latest Ratings for ELNK

Nov 2016DowngradesBuyHold
Oct 2016Initiates Coverage OnOutperform
Jun 2016DowngradesNeutralUnderweight

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Posted-In: D.A. Davidson James G. MoormanAnalyst Color Price Target Analyst Ratings


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