Boingo Wireless (WIFI)

[PennyHeaven7]

Boingo: Street Picks Up Coverage; Gets 4 Thumbs Up From Bankers
Jun. 13 2011 - 9:44

By ERIC SAVITZ
http://blogs.forbes.com/ericsavitz/2011/06/13/boingo-street-picks-up-coverage-gets-4-thumbs-up-from-bankers/?partner=yahootix
Analysts at the four investment banks that took Boingo Wireless this morning launched coverage of the WiFi hot spot provider – and I know you’ll be shocked to hear this – they all recommend buying the stock. Boingo came public May 4 at $13.50 a share, and has since staged a banker-embarrassing full-scale collapse, closing Friday at $7.65. This morning, the analysts come riding to the rescue.

•Deutsche Bank analyst Brett Feldman launched with a Buy rating and $15 target. Feldman writes that there are three reasons to be bullish on the stock: the company should benefit from adoption of smartphones and tablets; an attractive recurring revenue model with low customer acquisition costs and low core cap ex; attractive valuation. He sees Boingo posting 2011 revenue of $93 million and profits of 13 cents a share, with 2012 revenue of $113 million and profits of 10 cents.
•Credit Suisse analyst John Blackledge launched with an Outperform rating and $14 target. “We expect strong top-line growth (mid-teens) and continued margin expansion over the next few years, driven by further subscriber adoption and continued solid wholesale growth,” he writes. “We believe the recent weakness in the stock is overdone and look at current levels as a good entry point for investors.” The Credit Suisse analyst attributes the sharp post-IPO fall in the stock to “general market conditions and potentially limited appetite for unproven public companies, despite strong near and longer term growth projections.” His forecast is for 2011 revenue of $108.9 million with profits of 30 cents a share, and 2012 revenue of $126.9 million and profits of 40 cents a share.
•William Blair analyst Jim Breen begins coverage with an Outperform rating. He sees at least 25% upside for the stock. He notes that the company “is believed to have the largest Wi-Fi hotspot footprint in the world,” with over 325,000 venues in more than 100 countries, including 85 of the top 100 most-trafficked airports globally.” He sees profits of 17 cents a share this year, and 26 cents next year.
•Pacific Crest analyst James Faucette picked up coverage with an Outperform rating and a $13 price target. “We believe that Boingo is a strong play on the rapidly growing use of Wi-Fi, driven by increasing wireless data traffic, increasing cellular data costs and the generally better performance that Wi-Fi can deliver,” he writes. “We believe that the market significantly underestimates the advantages that Boingo is developing in securing key high-traffic sites like O’Hare International Airport, Kennedy International Airport and Soldier Field, particularly given the huge wave of locations that we believe are likely to deploy Wi-Fi networks and services in the coming two to three years.” He sees profits of 13 cents a share this year and 28 cents next year.