NNDS' Reasons to Remain Bullish

Zacks senior computer technology analyst Robert J. Perri, CFA has recently upgraded the American Depositary Receipts (ADRs) of computer networking company NDS Group Plc (NNDS) to Buy.  Here are some of the reasons why:

"We expect NNDS to report a solid fiscal first quarter, despite a currency headwind. We expect the company to continue to take advantage of gaming and DVR technologies that are built into set-top boxes, and continue to win new deals in emerging markets during 2008 and beyond. We are maintaining our revenue and earnings outlook for 2008 and 2009 despite this headwind, and expect the company to continue to expand in emerging markets.

"The results for the fourth quarter were much better than our expectations, and we expect the company to continue to grow revenues in excess of 15%, while growing earnings more than 20%, a year as the company has now established a presence in several emerging markets and can now begin to leverage its presence in these markets to fuel growth through add-on services. Additionally, the continued add-on acquisitions the company makes help to improve its technology and could be leveraged into further revenue growth opportunities in the longer term.

"As the company continues to take advantage of the move to gaming and DVR technology built into the set-top box, and our 2008 estimates become more visible, we believe shares of NNDS will appreciate after building a solid base over the past six months. We continue to rate the shares of NNDS a Buy, and have raised our price target to $58.00, based on the company selling at 22.5x our new 2008 EPS estimate of $2.58 per share."

Read the full analyst report on NNDS.