Telos’ FY21 Revenue Outlook Exceeds Estimates; Stock Spikes Over 19%


Shares of Telos Corporation are up 19.2% in Friday’s pre-market session after the information technology and cybersecurity company reported better-than-expected 4Q results and provided 1Q and FY21 revenue outlooks that topped the Street’s estimates.

Telos’ (TLS) 4Q reported net income of $3.9 million compared to a loss of $3.5 million in the year-ago quarter. Earnings of $0.08 per share came in better than analysts’ loss expectations of $0.10 per share.

Revenues of $44.9 million slightly beat the Street’s estimates of $44.7 million but declined 3.4% year-over-year. The company said, “The expected decline in revenue was due to the ramping down of the U.S. Census contract during the fourth quarter of 2020.”

As for 1Q, the company projects revenue in the range of $49-$52 million, higher than consensus estimates of $43.9 million. For fiscal 2021, Telos anticipates revenue in the range of $283-$295 million. Analysts were anticipating FY21 revenues of $275.4 million. (See Telos stock analysis on TipRanks)

On March 3, Colliers Securities analyst Catharine Trebnick raised the stock’s price target to $45 (46.3% upside potential) from 29 and maintained a Buy rating following the preliminary 4Q results. In a note to investors, the analyst said, “We believe the gross profit outperformance puts a positive bias on our forward estimates.” Trebnic believes “the gross margin improvement indicates margin expansion across the company’s distinct product segments.”

Overall, the Street has a Strong Buy consensus rating on the stock based on 5 Buys. The average analyst price target of $42.60 implies upside potential of about 38.5% to current levels. Shares have gained about 51.6% since the company was listed on NASDAQ on Nov. 19, 2020.

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