PR - Four Firms Initiate Coverage on SoundBite with Positive Ratings

Shares of SoundBite Communications Inc. (Nasdaq: SDBT) rose Wednesday after a number of investment houses initiated coverage on the company with positive ratings, saying its unique technology primed the company for strong growth. SoundBite is an automated voice messaging company.

Cowen and Co. describes the company as enabling "call-center operators to drive down costs by maximizing agent time by connecting call-center agents to people that have chosen to receive outbound calls." Cowen, which rated the company outperform, said the technology could be used for debt collection, telemarketing and customer-care campaigns, and estimated that the global market for automated voice messaging products is more than $14 billion.

Cantor Fitzgerald, which initiated coverage with a buy rating, cited a Frost & Sullivan prediction that the call-center market would grow to $1.49 billion in 2013 from $127.4 million in 2005. Cantor estimated SoundBite’s 2007 revenue would grow 34 pecent, while 2008 revenue would rise more than 29 percent.

"Soundbite’s highly recurrent revenue stream provides a meaningful level of downside protection to investors," Cantor wrote.

Needham & Co. said it expects SoundBite’s revenue to grow "at least 30 percent annually for the next half decade."

Needham called the company a buy, citing SoundBite’s cost model, where it is paid based on minutes used or calls made. "This is a low up-front cost model that produces upwards of 90 percent revenue visibility into the upcoming quarter’s results," the firm wrote in a note to clients.

Both Needham and Cantor issued price targets of $10. Thomas Weisel, which rated the company overweight, set a target of $13.

In a note to clients, Thomas Weisel wrote: "We believe that the company’s deep expertise in the collections space will prove to be a significant competitive advantage relative to competing vendors and legacy customer contact solutions, and we look for the company to build on this market position by further expanding its reach into the marketing, notification and outbound customer-care channels for first-party customers."

Shares of SoundBite rose 4.8 percent in midday trading to $7.24. The company began trading on Nov. 1.