Market Overview

'No Mas': Chardan Downgrades DigitalGlobe


Chardan Capital's James McIlree downgraded the rating on DigitalGlobe Inc (NYSE: DGI) to Neutral.

"For many quarters the company has struggled to grow revenues in US Value added services, which declined from $118 million in 2014 to $95.4 million in 2015. We think it will fall again in 2016," McIlree explained.

Although DAP revenues increased to $121 million in 2015, DigitalGlobal attributed the above normal revenues in Q2 and Q4 to geo-political events and management has been unwilling to comment on whether the trend would repeat in 2016.

According to the Chardan Capital report, "The biggest disappointment has been commercial revenues which fell from $154 million in 2013 to $148 million in 2014, $134 million in 2015 and we estimate will fall to $132 million this year."

Given the increasing competition in the commercial market from the low-end segment and DigitalGlobal's pricing, the company has been unable to penetrate the higher volume market segments.

In addition, expenses are expected to rise during 2016, driven by new contracts, bonuses and launch related costs in Q4.

On the other hand, cash generation continues to be robust and redeployed for share buybacks. Also, while the valuation is favorable at present, "with negative trends in the company's growth areas still in place, we think it will be difficult for the multiple to expand," McIlree added.

The 2016 revenue and EBITDA estimates have been lowered from $704 million to $686 million and from $363 million to $336 million, respectively.

Latest Ratings for DGI

Jul 2017PiperJaffrayDowngradesOverweightNeutral
Feb 2017DoughertyDowngradesBuyNeutral
Jul 2016JP MorganMaintainsNeutral

View More Analyst Ratings for DGI
View the Latest Analyst Ratings


Related Articles (DGI)

View Comments and Join the Discussion!

Posted-In: Chardan Capital Markets James McIlreeAnalyst Color Downgrades Analyst Ratings

Latest Ratings

PEImperial CapitalMaintains13.0
GNMKCanaccord GenuityMaintains20.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at