Ness Technologies Inc (NSTC)

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Oscar Gruss starts Ness with Buy rating
11.12.05 | 11:14 By Omri Cohen
Oscar Gruss on Friday started coverage of Ness Technologies (Nasdaq: NSTC) with a Buy rating.
Analyst Ehud Eisenstein's 12-month price target for Ness is $13, which is 30% above its level on Nasdaq.

Ness is Israel's biggest information technology house. It also boasts strong presence in India and in eastern Europe. Eisenstein believes it's an attractive investment opportunity, bringing exposure to the sector of outsourced computer services.

He predicts Ness will present 25.7% revenue growth in 2005 to $382.7 million, and that profit will increase 51.4% year over year to $21.8 million, or 63 cents per share on a pro forma basis.

For 2006 Eisenstein projects 18.5% revenue growth to $453.6 million, and a 43.6% increase in earnings to $31.3 million, or 85 cents per share (pro forma).

The upswing in the Israeli economy should support 10% revenue growth for Ness, while overseas operations will provide 30% of the company's upper-line growth.

Ness is the leader in computerization services in Israel, an industry Eisenstein calculates to be worth $1.3 billion a year.

"Ness holds 15% of the Israeli market, which supplies 54% of its revenues. Despite the fierce competition, its status as sole provider of SAP systems in Israel differentiates it from the rivals," he explains.

He also praises its overseas operations, which focus on two main fast-growing markets: the U.S. and India. It is also active in the east European sphere.

He foresees Ness will continue to buy companies in India, and is likely to start operating in computer outsourcing in China.

http://www.haaretz.com/hasen/spages/656337.html

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