Analyst upgrades VanceInfo, raises estimates on growth in telecommunications; shares surge
By APWednesday, September 16, 2009
Analyst upgrades VanceInfo, raises estimates
NEW YORK — Shares of offshore software developer VanceInfo Technologies Inc. surged 10 percent Wednesday after an analyst upgraded the company’s shares and raised his estimates citing strong demand from telecommunications companies.
James Friedman of Susquehanna Financial Group wrote in a note to investors that after meeting with the China-based company’s management as well as with private competitors, he believes VanceInfo should benefit from a surge in mobile phone subscriber growth.
“Our sense is that VIT is seeing improved growth in China (telecommunications), coupled with re-acceleration of activity from Western clients,” Friedman said, upgrading the company to “positive” from “neutral.”
VanceInfo provides application development and maintenance to telecommunication carriers, equipment vendors and handset manufacturers. Friedman said he expects the company will benefit from the introduction of third-generation handsets as well as future replacement cycles.
Friedman raised his 2010 revenue estimate to $175 million from $165.6 million, and his earnings-per-share estimate by 2 cents to 65 cents. He also set a price target of $19 on VanceInfo’s stock.
Shares of VanceInfo jumped $1.55, or 10 percent, to $16.71 in late trading Wednesday. The stock has traded between $4.20 and $17.13 over the past year.
