Piper Jaffray initiates coverage on Internap (Nasdaq: INAP) with a Neutral. Price target $3.50.
Piper analyst says, "We believe INAP will continue to face material challenges in the IDC sector. Our price target is supported by our 10 year DCF using a 13.1% WACC discount rate, 3.0% perpetual growth rate, and company comparables. INAP trades at 2.5x '09 EV/EBITDA compared to a peer average of 6.2x, and our $3.50 price target represents 3.6x '09E EV/EBITDA...Risks include further delays in INAP's CDN segment, severe economic shocks impacting customers, and a material reduction in Internet traffic volumes."
Tuesday, September 9, 2008
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