"While the award of the Aura contract to a competitor is disappointing, we continue to see abundant opportunities for continued high growth," said Leonard Moodispaw, the company's president and CEO, in a statement. "Although this contract has captured a great deal of interest by our investors, we continue to view it as only one part of a much larger plan to build on the core strengths and focus of KEYW as a leading provider of mission critical cyber and intelligence solutions to the defense and intelligence communities."
The stock was last quoted at $7.70, down 23%, on volume of less than 15,000, according to Nasdaq.com. The Hanover, Md.-based cyber security company went public last September, selling 9.1 million shares at $10 each, pricing at the bottom of its expected range. The stock ran as high as $16 last December, and was down more than 30% since the start of 2011 prior to the after-hours move.
Noble Financial issued a research note on Sept. 9 discussing the impending decision on the contract. The firm said the contract was believed to be with the National Security Agency, and estimated the deal would have represented $65 million worth of its 2012 revenue estimate of $370 million. It judged the company to be in fairly good shape, even if this scenario came to pass."While a contract loss would be a negative, the company should have $305 million of 2012 revenues excluding the contract, which would justify a high single-digit trading valuation," Noble Financial said. "We rate shares a Buy and believe the company's projects will be well funded and support 20% organic growth assumptions." KEYW is expected to report its fiscal third-quarter results on Oct. 31. The average estimate of analysts polled by Thomson Reuters is for earnings of a nickel per share on revenue of $55.5 million in the September-ending quarter. The five analysts covering KEYW are all bullish, split between strong buy (2) and buy (3) ratings. --Written by Michael Baron in New York.
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