Paetec Results Mixed, Collins Stewart Reiterates Buy (PAET)

PAETEC Holdings PAET reported mixed results yesterday. Revenue was inline at $396.1 million but EBITDA was weaker than expected, coming in at $65.1 million. Collins Stewart said, "With stronger booking in 1H10 and improving customer profile, we believe the revenue growth recovery is pushed back slightly and will likely materialize toward the end of the year. We continue to expect its EBITDA margin to expand both sequentially and year-over-year in 2H10, as the company continued to leverage its broader footprint following the MeLeod merger. Currently priced at 5.0x estimated 2011 EBITDA, we continue to recommend the shares of Paetec Holdings with a $6.0 price target." PAETEC is rated Buy by Collins Stewart, with a price target of $6.00. PAET is currently trading at $4.11.