NEW YORK, June 28, 2004 (PRIMEZONE) -- The following is an investment opinion issued by Investrend Research Syndicate:
Investrend Research analyst Robert Vile, CPA, CFA, has initiated coverage of I-Sector Corp. (AMEX:ISR) with a "Strong Buy" rating, and a 12-month target valuation of $18. He said the company's long-term goal is to become one of the leading national providers of Cisco (Nasdaq:CSCO)-centric network and IP Telephony solutions to enterprises.
Vile said I-Sector's shares sell at 23.4x his 2004 earnings estimate of $0.35, and 11.7x his 2005 estimate of $0.70, a discount of 47% of his 2004 revenue estimates of $89.1 million and 36% of his 2005 estimates of $117.4 million. He said the shares are also a significant discount to the communication equipment group average for price/sales and price/earnings ratios.
"We believe this discount is unwarranted given the expectation of increasing profitability and projected revenue growth rates of 43% in 2004 and 32% in 2005. We believe the stock can sell at 1x our estimated 2004 revenues of $89 million or an earnings multiple of 23x our 2005 estimate of $0.70 per share."
Vile noted that management has reorganized over the past three years to focus on one of the fastest growing subsectors of the technology market, IP telephony; the deployment of IP Telephony equipment is accelerating, and I-Sector plans to enter each of the top 10 to 12 U.S. markets, while actively marketing its Netsurant support services to take advantage of the significant growth in higher margin post implementation support services.
After its May equity offering, I-Sector has a $8.3 million cash balance, and $11.1 million working capital versus long-term debt of $204,000, plus a $2.4 million net operating loss carry-forward. It also has increased its Textron credit facility from $10 million to $15 million.
The full report, including important disclosures and disclaimers, is available at http://www.investrendresearch.com, and at the company's InvestorPower page at http://www.investrend.com/company/list.asp?sPathParam=yes. Investors are advised to read these carefully before investing in the equities of any enrolled company.
Credentials for analyst Robert Vile, CPA, CFA are at http://www.investrend.com/articles/secondlevel.asp?level=238.
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