11:12 LVLT Notable Mention: LVLT (3.46 +0.12)
Needham reiterates their Buy on LVLT, but cuts their target to $6 from $7 based on continued pressure from AOL disconnects, flatter than expected growth in transport and IP services, and a long-term view towards the co's ability to grow VoIP and next-gen services. That said, firm expects the stock to outperform from current levels as packet voice services proliferate at the network edge, driven by broadband deployment and IP PBX upgrades of legacy enterprise systems. By Q4, firm expects growth in VoIP services, which will leverage the co's existing softswitch platform addressing 90%+ of the U.S. (i.e., 300 cities), to more than offset attrition of dial-up, turning LVLT into a top-line and EBITDA grower that should drive the co to positive free cash flow and result in a significantly higher valuation in 2005.
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