Drexel Hamilton Reiterates a Buy Rating on GTT Communications

By Jason Carr

In a report released today, Barry Sine from Drexel Hamilton reiterated a Buy rating on GTT Communications (NYSE MKT: GTT), with a price target of $28. The company’s shares opened today at $24.20, close to its 52-week high of $24.85.

Sine commented:

“We see enormous financial and strategic synergies from this deal. We reiterate our Buy rating on GTT shares. Technically, the stock woke up yesterday after briefly entering oversold territory ahead of earnings. GTT reported 36% revenue growth driven by past acquisitions. Revenue was up a strong 2.3% sequentially, despite strong currency headwinds. EBITDA came in at $32.1 mm, up 54% and well ahead of our estimate and consensus. GTT boosted its EBITDA margin by 90 basis points sequentially on realization of synergies from past acquisitions. The strong 3Q results were overshadowed by the acquisition. It brings GTT a sizable new customer base, particularly in the data intensive media industry, and gives it fiber assets for the first time. We see GTT cancelling existing fiber leases, using Hibernia fiber for undersea and long-haul fiber requires.”

According to TipRanks.com, Sine is a 1-star analyst with an average return of -1.6% and a 37.5% success rate. Sine covers the Technology sector, focusing on stocks such as Shenandoah Telecommunications Co, Telephone & Data Systems Inc. , and Fairpoint Communications.

Currently, the analyst consensus on GTT Communications is Strong Buy and the average price target is $29, representing a 19.8% upside.

In a report released today, Cowen & Co. also reiterated a Buy rating on the stock with a $31 price target.

Based on GTT Communications’ latest earnings report for the quarter ending September 30, the company posted quarterly revenue of $132 million and quarterly net profit of $5.13 million. In comparison, last year the company earned revenue of $97 million and had a net profit of $1.76 million.

Based on the recent corporate insider activity of 100 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of GTT in relation to earlier this year.

GTT Communications, Inc. provides telecommunication services. It operates a global Tier 1 IP network connecting clients to locations and cloud applications around the world. The company provides reliable, scalable and secure solutions, including private, public and hybrid cloud networking, high bandwidth IP transit for content delivery and hosting applications, on-demand and high-demand network capacity to support varying needs and network-to-network carrier interconnects. The company was founded by H. Brian Thompson on January 3, 2005 and is headquartered in McLean, VA.