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SunPower (SPWRA)

RBC Capital downgrades to sector perform from outperform

RBC Capital analyst Stuart Bush said on Oct. 23 that SunPower's $466 million in third-quarter revenue and 42 cents non-GAAP EPS compare to his respective $451.7 million and 43 cents estimates. He noted that SunPower reported a 20.7% gross margin vs. his 23.6% estimate. The analyst believes faster degradation of German solar subsidies in 2010 and continued delay in a U.S. climate bill will buffer demand growth near-term, setting up the company for further price and margin pressure.

Buh said SunPower's "flattish" fourth-quarter guidance, unclear end markets, and likely margin pressure in 2010 give him pause; he believes EPS growth expectations could disappoint. He cut his $1.29 2009 operating EPS estimate to $1.21, and his $2.21 2010 forecast to $1.65.

Bottomline Technologies (EPAY)

Needham upgrades to strong buy from buy

Needham analyst Jonathan Maietta said on Oct. 23 that Bottomline's $36.6 million in first-quarter revenue and non-GAAP EPS of 27 cents topped his respective estimates of $34.4 million and 18 cents; the Wall Street consensus forecasts were $35.5 million and 18 cents. Maietta noted that orders and backlog were strong, up 4.7% and 9%, respectively, year-over-year; each of these metrics provides the company with significant revenue visibility, he said. The analyst remains "excited" about Bottomline's acquisition of PayMode from Bank of America, which closed Sept. 14. He said PayMode creates another high visibility revenue stream for the company.

Maietta raised his fiscal 2010 (ending June) pro-forma EPS estimate from 74 cents to $1.00, and hiked his $14 price target to $18.

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