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SNCR: most compelling Goldman growth story
By Rob | January 10, 2008
Just this morning, Goldman announced that “Synchronoss (SNCR) is the most compelling growth stock in our coverage; the one that has the highest potential for upward estimate revisions as it continues to consolidate market share.” The firm has set a $41 target for the $900 mill company.
The firm is concerned that small caps are underperforming and it so removed the firm from its Conviction List. Part of that decision is due to a tactical, with a “stop-loss” decisionand it is not a change in investment outlook for the firm.
The stock’s sell-off around AT&T’s comments this week was particularly exaggerated given that trends at AT&TMobility remain robust. Furthermore, as recently as AT&T’s analyst meeting in December, this customer remains deeply committed to its online sales strategy (Synchronoss supports the online portal for Mobility), indicating that it would like to “more than double its online sales” by 2010 in aggregate. This, along with the recent win at Sprint, and international expansion, should create significant opportunities for Synchronoss in 2008. The firm is very well-positioned with next-generation technology supporting subscriber activation and ongoing customer care or major wireless and VoIP providers.
” We retain our Buy rating on SNCR, driven by our continued bullish outlook for the company in 2008 and supported by our recent telecom IT services investment framework. But we are removing the shares from the Americas Conviction Buy List as the stock has reached an internal stop-loss limit, declining 25.9% since being added on December 20, 2007, compared to the Nasdaq, which declined 6.3% (S&P down 3.5%). In the past 12 months, the stock has increased 84.2% (S&P down 0.2%). The stock’s volatility and our stop-loss discipline cause the removal today; however, our conviction in our 2008 outlook remains unshaken and we find current levels attractive. “
