Syniverse Holdings (NYSE: SVR) provides
a variety of technology services to wireless telecommunications companies. Those services enable phone number portability; fraud management; the invoicing and settlement of wireless roaming calls; and the routing and translation of services between carriers. The company also offers data clearing and financial clearing services. Customers include AT&T (NYSE: T), Sprint Nextel (NYSE: S) and Verizon Communications (NYSE: VZ).
The firm pleased investors last week, when it reported Q1 EPS of 37 cents and revenues of $115.6 million. Analysts had been looking for 26 cents and $102.4 million. In discussing the quarter, the CEO noted particular strength in messaging and mobile data. Management also guided FY08 revenues to $455-$465 million ($435.83M consensus). JP Morgan subsequently upgraded the shares to "overweight". Wedbush Morgan reiterated its "strong buy," Lehman Brothers its "overweight" and Brean Murray its "buy." Price targets ranged between $24 and $26.
SVR shares
popped through 30-day/50-day moving average resistance on the news and then moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Altogether, brokers now recommend the issue with four "strong buys," five "buys" and three "holds." Analysts expect a 15% growth rate, through the next year. The SVR Price to Book ratio (2.91), Price to Free Cash Flow ratio (14.61), Sales Growth rate (37.06%) and EPS Growth rate (99.67%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 66% of the outstanding shares. Over the past 52 weeks, the stock has traded between $11.65 and $22.23. A stop-loss of $18.25 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
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