TMCnet Feature Free eNews Subscription
February 05, 2013

Call Your Broker: Investment Analysts are Bullish on NeuStar

By Jacqueline Lee, Contributing Writer

NeuStar (News - Alert) earns the majority of its revenue by routing and managing both phone calls and text messages for major U.S. telecom providers. The company also serves as a neutral third-party administrator for the Number Portability Administration Center (NPAC), which enables consumers to keep their telephone numbers even when they switch carriers.



Now, NeuStar has caught the eyes of investment analysts. Investor’s Business Daily (IBD), Daniel Meron, an analyst for RBC Capital Markets, predicts 8 percent growth for the company, both top and bottom line.

Meron bases his numbers on a 6-percent rise in carrier services, which reflects the expansion of number portability with accounts backed by contracts. Meron also cites continued expansion of information and enterprise services like IP addressing, real-time analysis and other services.

NeuStar expects to report its Q4 2012 earnings after the close of the markets today. Thomson Reuters (News - Alert) polled a number of analysts, who predicted a 41-percent jump in earnings per share (EPS) as well as a 23-percent jump in revenue.

NeuStar shares are already up 9 percent in 2013 after a 20 percent expansion in 2012. The stock has an IBD Relative Strength Rating of 86 and is ranked 19th out of 50 in the IBD 50 ranking of top stocks.

While NPAC’s contract is set for renewal, most analysts expect NeuStar to continue as its administrator. "We believe NeuStar remains best positioned to win NPAC re-bid due by mid-2013, thanks to its incumbency, though pricing and terms are yet to be determined," Meron stated.

In 2011, NeuStar paid $650 million in cash for Targus Information, a source of caller identification and analytics. Essentially, NeuStar routes every call and text message in North America as well as many Internet queries. Targus databases add information about who is calling or querying, and from what phone number or IP address.

NeuStar gained its market in 1996 after winning contracts to serve four of the seven “Baby Bells” created by the breakup of the telecommunications monopoly. When competitors failed to satisfy the other three phone companies, those companies sent their business to NeuStar.




Edited by Braden Becker
» More TMCnet Feature Articles
Get stories like this delivered straight to your inbox. [Free eNews Subscription]
SHARE THIS ARTICLE

LATEST TMCNET ARTICLES

» More TMCnet Feature Articles