ORLANDO, Fla., June 20, 2007 (PRIME NEWSWIRE) -- RedChip Visibility, a division of RedChip Companies, Inc., announced that it has issued an IT Group Holdings, Inc. (OTCBB:ITGL) first quarter 2007 research update.
Joe Blankenship, MBA, CFA Level I Candidate, RedChip Research Analyst, wrote in the report:
"We maintain our BUY recommendation on ITGL with a 12-month price target of $1.80 per share. The Company's progress in adding new contracts with resellers has demonstrated the effectiveness of having its own switching capability. Additionally, their gross margin of 6.0 percent should continue to improve with new business.
"We have revised our revenue estimate for FY2007 from a previous estimate of $60 million to a current estimate of $50 million to reflect the time required for resellers to recruit customers. We now expect the larger gains in revenue to occur in the last two quarters of the year. Accordingly, we have also adjusted down the revenue expectation for FY2008. However, based on higher margin services we have increased our EPS estimate for FY08 to $0.08. Our twelve-month price target of $1.80 per share is based on a multiple of 22.5x the 2008 EPS estimate. In addition, we based our twelve month target price on a 1.8x projected FY07 revenues of $50 million. This is in line with a close industry peer, DECC, which is trading at a 1.7x P/S (ttm)."
To receive a complimentary copy of the RedChip Visibility initial research for ITGL, please visit: http://www.redchip.com/visibility/about.asp?page=requestITGL_Q1_2007.
About RedChip Companies, Inc.
RedChip Companies is an international small-cap research and financial public relations firm with offices in Beijing and Orlando and affiliates in New York and San Diego. RedChip delivers measurable results for its clients through its extensive international market expertise as well as its comprehensive platform of products: RedChip Research(tm), Traditional Investor Relations, Digital Investor Relations, Institutional and Retail Conferences held throughout the United States, and RedChip Radio(tm). To learn more about RedChip's products and services please visit: http://www.redchip.com/visibility/services.asp.
The RedChip Companies Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=2761
RedChip Visibility Research Disclosure
ITGL paid RedChip Visibility $28,000 for the RedChip Visibility Research Program, which includes this report. RedChip Visibility, a division of RedChip Companies, Inc., and the Aurelius Consulting Group Inc., in a joint marketing agreement, have been contracted by IT Group Holdings, Inc. to increase investor awareness of ITGL to the small-cap equity community. These services may include investor conferences and digital and print distribution of ITGL investor related materials. In the purview of Section 17(b) of the Securities Act of 1933 and in the interest of full disclosure, we call the reader's attention to the fact that the Aurelius Consulting Group is an investor relations firm hired by the Company and receives a monthly fee of $8,000 for investor relations services and 250,000 warrants with a strike price of $0.30 and 250,000 with a strike price of $0.50 for twelve months of service.