Cowen’s Rob Stone Comments on Comverge (Nasdaq:COMV) - Maintains Neutral Rating

Apr 13, 2009
Author: SCP Editor

April 13, 2009 – Analyst Comments – Cowen’s Rob Stone said in a note this morning that Comverge’s (Nasdaq:COMV) 60% gains since reporting its Q4 results, and nearly 100% gains from this year’s low are tough to justify from a valuation perspective. Stone maintained a NEUTRAL rating on the stock.

Key Takeaways

·         Comverge appears to be positioned to meet or exceed 2009 contract goals – 48MW in VPC contracts are closed with 165MW waiting regulatory approval, 135MW are in negotiations and 35MW are short-listed; $70 million in contract awards are closed, $200M is in negotiations/waiting approval, and $100M is short-listed;

·         New software could provide upside, but only about 150 of more than 500 utility customers use the current product so attach rate to Comverge’s hardware looks low and the market is competitive;

·         Expects FY09-11 revenue of $92 million, $120 million and $150 million, respectively, gross margin of 38.2%, 44.8% and 44.4%; and EPS of $(1.39), $(0.71) and $(0.17).

·         Maintaining NEUTRAL rating.