Cybersecurity Firm Telos Jumps on Guidance, Price-Target Rises

Telos had a solid start to its first quarter as a public company, an analyst says. The stock is higher.
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Analysts on Friday lined up to raise their price targets for Telos  (TLS) - Get Report after the cybersecurity company beat Wall Street's fourth-quarter earnings expectations and provided strong first-quarter and full-year guidance.

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Shares of the Ashburn, Va., company at last check were 22% higher at $37.58. 

Telos swung to net income of $3.9 million, or 8 cents a share, from a loss of 9 cents a share in the year-earlier quarter. Revenue totaled $44.9 million, off 3.4% from $46.5 million.

The company projected first-quarter revenue in the range of $49 million to $52 million, compared with the FactSet consensus of $49.3 million. 

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For fiscal 2021, Telos expects revenue to range $283 million to $295 million, compared with the FactSet call of $286.8 million.

BMO Capital Markets analyst Keith Bachman, who has an outperform rating on the stock, raised his price target to $40 from $24, saying in an investors note that Telos had a solid start in its first quarter as a public company.

Telos's "markets served are growing in the mid-teens, [and Telos] can expand from primarily serving U.S. government agencies at present to corporate clients over the longer term," he said.

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The company "did well on both [revenue] and margins, and guidance appears solid as well as prudent," Bachman said.

D.A. Davidson analyst Andrew Nowinski, who has a buy rating on the stock, raised his price target to $40 from $30.

Nowinski said Telos management signaled an increase in inbound customer inquiries and an overall improvement in demand trend. He said these trends should continue and possibly accelerate as the economy opens up.

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Wedbush analyst Daniel Ives noted the 2021 forecast, saying it shows that federal cybersecurity spending is ramping ahead of expectations across the board. Ives raised his price target to $47 from $45 with an outperform rating. 

B. Riley Securities analyst Zach Cummins raised his price target to a Wall Street high $50 from $45 and reiterated a buy rating following the company's "solid" fourth-quarter results.

Cummins said "multiple levers ... present upside optionality to management’s initial outlook, creating a likely ‘beat-and-raise’ scenario in the coming quarter."