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Bullish guidance issued Friday morning by online brokerage


(AMTD) - Get TD Ameritrade Holding Corporation Report

struck several analysts as a low-ball estimate that is likely to move higher as the year progresses.

Omaha, Neb.,-based Ameritrade said its expects to earn 14 cents to 17 cents a share in its fiscal first quarter, and 37 cents to 59 cents a share for the full year. The Thomson First Call consensus is 14 cents a share in the quarter and 55 cents a share for the full year.

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The width of the year guidance is significant in a valuation calculation. With the stock recently up 60 cents, or 5%, to $12.84, it's trading at roughly 22 times the high end of its year guidance and 33 times the low end.

The outlook seemed far too modest in the current market to Matthew Snowling, an analyst at Friedman Billings Ramsey.

"Mutual fund flows are off the charts, and it's not hard to guess that online brokers are coming back again," he said. "They're the primary beneficiary of a pickup in retail interest in the equity markets. We're just getting into the season where investors start trading more at the year-end, and we think it will accelerate from here."

Snowling noted that the guidance primarily reflects a higher estimate for the first quarter, meaning the company left the rest of the year alone in hopes that investors can later be pleasantly surprised. Ameritrade's November purchase of Oregon online brokerage Bidwell, which added 100,000 accounts, combined with new account figures that could go above 15,000 per month, point to more revenue in the next nine months, Snowling said.

"They haven't built in the pickup in activity," he said.

As is sometimes the case, various Street estimates for Ameritrade's stock price reflect optimism. Raymond James' Michael Vinciquerra has target price of $14.50, while Richard Repetto at Sandler O'Neill rates Ameritrade a buy, with a $15.50 target.