Virtusa Corp Receives a Rating Update from a Top Analyst

By Ryan Adsit

In a report released today, Joseph Foresi from Cantor Fitzgerald maintained a Buy rating on Virtusa Corp (NASDAQ: VRTU), with a price target of $60. The company’s shares opened today at $51.04, close to its 52-week high of $52.88.

Foresi said:

“The Deal. Virtusa entered into an equity agreement to purchase eTouch Systems. eTouch Systems is a technology services company specializing in Digital Web Engineering. eTouch delivers technology services and accelerates growth for Global 1000 companies by solving complex business challenges with breakthrough technical innovations. eTouch partners with hi-tech enterprises to service their business and technology needs. Virtusa will acquire eTouch Systems for $140 mn in cash, with up to $15 mn set aside for retention bonuses. Virtusa expects the transaction to be dilutive to 4QFY18 GAAP EPS by ~$0.04, but neutral on a non-GAAP basis. Management expects the transaction to be dilutive to GAAP EPS in FY19, but accretive to non-GAAP EPS in FY19.”

According to TipRanks.com, Foresi is a top 25 analyst with an average return of 19.6% and a 88.1% success rate. Foresi covers the Technology sector, focusing on stocks such as Automatic Data Processing, Jack Henry & Associates, and Fidelity National Info.

Currently, the analyst consensus on Virtusa Corp is Strong Buy and the average price target is $57.67, representing a 13.0% upside.

In a report released today, Wedbush also maintained a Buy rating on the stock with a $60 price target.

Virtusa Corp’s market cap is currently $1.48B and has a P/E ratio of 280.44. The company has a book value ratio of 3.0629.

Based on the recent corporate insider activity of 87 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 VRTU in relation to earlier this year. Most recently, in December 2017, Rowland T. Moriarty, a Director at VRTU bought 15,583 shares for a total of $169,469.

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Virtusa Corp. engages in the provision of information technology consulting, technology implementation, and application outsourcing services. Its services includes business process management, application services, infrastructure management, enterprise information management, independent validation services, platforming, mobility, enterprise resource planning (ERP) planning, business consulting, customer experience management, and cloud. The company was founded by Krishan A. Canekeratne, Tushara Canekeratne and John Gillis in November 1996 and is headquartered in Westborough, MA.