Netezza Corporation (NYSE: NZ) provides
data warehouse appliances. The company's Netezza Performance Server integrates database, server, and storage platforms in a purpose-built unit to enable detailed queries and analyses of stored data. The firm serves data-intensive enterprises in telecommunications, e-business, retailing, financial services, analytic services and healthcare. Amazon.com (NASDAQ: AMZN) is a major customer. IBM (NYSE: IBM) and Oracle (NASDAQ: ORCL) are competitors.
Netezza surprised the Street last week, when it reported Q1 EPS of three cents and revenues of $39.6 million. Analysts had been expecting two cents and $36.2 million. Management also guided FY09 revenues to $172 million, versus consensus of $166.65 million. Needham subsequently reiterated its "buy" rating on the issue.
NZ shares
popped on the earnings 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 stock with two "strong buys," four "buys" and two "holds." Analysts see a 33% growth rate, through the next five years. The NZ Sales Growth rate (56.52% y/y), EPS Growth rate (-0.44 to +0.03 y/y) and Return on Equity (17.88%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 43% of the outstanding shares. Since going public last July, the stock has traded between $7.02 and $17.57. A stop-loss of $11.40 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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