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Boingo Initiated With Outperform Rating, Oppenheimer Sets $12 Price Target

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Oppenheimer believes Boingo Wireless Inc (NASDAQ: WIFI) is well placed to take advantage of the data growth citing its radical transformation. Analysts Timothy Horan and Brajesh Mishra initiated an Outperform rating with a price objective of $12, implying more than 30 percent upside.

The brokerage predicts mobile data traffic will record a growth rate of 10x in the next five years. Analysts are confident the company could take advantage of it with the help of small cells combining both LTE and Wi-Fi roaming to cable and wireless operators.

In a note, Oppenheimer said, "Boingo can be the low-cost provider of offloaded wireless data traffic in dense areas. We believe growth in data usage will necessitate a 25-50% increase in cell site equivalent locations, driving 20%- plus growth in small cell growth (Wi-Fi and LTE). Given the secular tailwinds, we believe that Boingo can grow revenue by 12% and EBITDA by 15% per year."

The brokerage thinks Boingo would also have the advantage of using LTE through unlicensed spectrum to leverage its current asset footprint to add incremental revenue streams. Another factor is that there is strong incentive for carriers to execute LTE-U.

On the flip side, Boingo faces tough competition for venue rights and its capacity to grow cash flows depends largely on the expansion of venues across the region.

The stock advanced $0.37, or 4.25 percent, to $9.07 at time of writing.

Latest Ratings for WIFI

DateFirmActionFromTo
Oct 2020OppenheimerUpgradesPerformOutperform
Mar 2020Credit SuisseMaintainsOutperform
Mar 2020OppenheimerMaintainsOutperform

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