Monday, FBR Capital Markets reiterated its Outperform rating on Applied Signal Technology (APSG) and maintains $26 price target. The brokerage said the company's Q4 results were in line their expectations on top line, but exceeded expectation on earnings per share. EPS came in at $0.27 as against the firm's expectation of $0.23 and the firm said APSG is continuing its multi-quarter turnaround in margins and new business.
FBR said the company's cost savings initiatives, such as a lower employee-related expenses and greater royalties associated with the licensing of intellectual property for broadband uses drove margin expansion. Further, the firm said the company's order flow outlook is strong, with $69.5 million in the quarter (1.28x book-to-bill) that was higher than their expectations. Orders were up 75% compared to last year and reflect strong demand for sensor systems and broadband communications, the brokerage noted.
As such, FBR established 2010 estimates with revenue growth at 8.5% to $220 million and EPS at $1.20.
On Friday, the stock closed at $19.65.
For comments and feedback: editorial@rttnews.com