Here's how Friedman Billings Ramsey analyst Shawn Milne reacted to 4Q results from GSI Commerce (ticker: GSIC):
GSIC chart below.
Increasing confidence in long-term growth and leverage opportunity--maintain Outperform. The fourth quarter was a strong one, with better than expected NMS and revenue growth, gross margin expansion, and strong year-over-year improvement in EBITDA (despite ongoing investments). Importantly, given strong growth in GSIC’s existing business (20%-30%), rapidly expanding service deals, and new partner additions, we have increasing confidence in our 2005 and 2006 operating targets. Currently, GSIC is trading at approximately 14x our new FY06 EBITDA estimate of $43 million, versus 14x-20x for a peer group of Internet companies. We maintain our Outperform rating and slightly increase our price target to $22 from $20 based on 20x our FY06 EBITDA estimate.
Full disclosure: at the time of writing I'm short GSIC.