Pacific Growth Equities analyst Derek Brown sent a note November 8th to clients reacting to aQuantive's (ticker: AQNT) 3Q05 results. Key extracts:
• This morning, aQuantive posted strong Q3:05 results, with rev/EBITDA/EPS of $79M/$20M/$0.13, compared with our/consensus ests of $75M/$17M/$0.10
• Company continues to outperform the industry and seems to us to be ideally positioned for growth and margin expansion heading into seasonally robust Q4 period and beyond
• Raising ests for Q4:05 and 2006, despite conservative Q4:05 guidance, and reiterating our Buy rating on aQuantive’s shares
VALUATION AND RECOMMENDATION
aQuantive currently trades at 16x our 2006 EBITDA estimate of $98M and at 35x our 2006 PF EPS estimate of $0.59 — reasonable multiples, in our view, given what we feel are the Company’s impressive rate of growth and valuations of other leading Internet and traditional marketing companies. Equally important in our view, the Company’s execution has been nearly flawless in recent quarters, laying what appears to us to be the foundation for a prolonged period of outperformance in a very vibrant industry. With the stock down and numbers going up, we reiterate our Buy rating on aQuantive’s shares and encourage investors to buy/add-to positions in the stock at current levels.
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