ARDA’s Yerger Rates A-Power at OUTPERFORM

Apr 13, 2009
Author: SCP Editor

April 13, 2009 – ARDA Advisors’ Brian Yerger commented this morning on A-Power’s business and stock, rating the stock at OUTPERFORM, and calling for a price target at 6.5x 2010E EPS, which would be about $9.49 per share, or an implied market cap of $341 million, assuming, as Yerger does, about 35.9 million shares outstanding for the period.

Key Takeaways

·         Q4 and FY08 results (revenue and EPS) came in above street consensus

·         2009 distributed generation backlog expected to be booked as revenue is about $290 million, with net income of $29 million.

·         Wind turbine sales are anticipated to be at 30 units in 2009, at an ASP of $3.5 million, which should drive another $105 million in revenue, bringing aggregate revenue estimates to $395 million, which is “rational and attainable.”

·         Concerns remain about wind turbine ramp, and estimates will remain below company forecasts.

·         Believes shares are attractive at current levels, and that 2010 EPS/E of $1.46 is appropriate.

Rating at OUTPERFORM and valuation at “a conservative multiple of 6.5x 2010 EPS/E.