Irvine-based business software maker Kofax Ltd. received good early grades from two investment firms that recently initiated coverage.
Craig-Hallum Capital Group LLC, the sole underwriter for Kofax’ December initial public offering, said the company is poised for double-digit revenue growth as its latest software package, Kofax TotalAgility 7.0, picks up customers.
The software combines the company’s image-capture technology with business-process management and case management, data integration, analytics and mobile services.
“Limited awareness, accelerating revenue growth and a tested, very well regarded management team known for under-promising and over-delivering is usually a strong recipe for success,” Craig-Hallum Senior Research Analyst Jeff Van Rhee said in a recent investor note.
Kofax mainly competes against Nuance Communications for the market-share lead in the image-capture software segment, which is expected to grow 6.3% per year to $2.5 billion in sales in 2016, according to Harvey Spencer Associates and Forrester Consulting.
Northland Capital Markets initiated coverage with an “outperform” rating and a $10 price target.
“We believe what differentiates Kofax from its competition is its complete end-to-end solution and focus on mobile capabilities,” Northland analyst Scott Berg wrote in a recent note.
The company posted strong December-quarter results in its first earnings report since it began trading on the Nasdaq on Dec. 5.
Revenue hit $74 million, up 16.2% from a year earlier. Adjusted profits topped $13 million, up 29.1%.
Kofax raised $11.7 million in its IPO.
Progress in Asia
TTM Technologies Inc.’s recent restructuring and factory closure in China have helped the Costa Mesa-based printed circuit board maker improve manufacturing efficiency.
Chief Executive Tom Edman said in a recent conference call that the company’s Asia Pacific factories are running at 90% capacity. He cited “strong demand” for the company’s high-density and rigid-flex circuit boards used in smartphones, tablets and e-readers—demand that prompted a product shift to advanced-technology circuit boards.
The improvement is a marked change from six months ago, when TTM’s production in China was running at about 65% capacity, Matt Sheerin, managing director of equity research in the New York office of St. Louis-based Stifel Financial Corp., told the Business Journal.
That led TTM to close a manufacturing plant and lay off about 600 employees there.
The Business Journal reported about a year ago that the company signed a deal with Shengyi Technology Co. to sell a 70.2% stake in a 190,000-square-foot plant in China for about $113 million, and TTM acquired Shengyi’s 20% stake in a nearby 650,000-square-foot plant for roughly $29 million.
The company posted a strong fourth quarter, with sales and adjusted profits beating Wall Street expectations. Revenue topped $366 million, up 8% from a year earlier. Adjusted profits hit $22.1 million, up 14.5%.
TTM recorded sales of $1.4 billion for 2013, up 7.7% over 2012. Adjusted profits fell 26.8% to $51.3 million.
It expects first-quarter revenue to be $290 million to $310 million, below analyst estimates of $317.4 million. Adjusted profits are projected to be between $2.4 million and $7.4 million, below Wall Street’s consensus of $10.7 million.
