LaserCard to move forward on Italian government project
Shares of LaserCard Corp. (Nasdaq: LCRD) are rallying today after investors cheered the Italian government’s decision to move forward with the secure ID credentials supplier’s government contract.
The Mountain View, Calif.-based company said it received the “green light” on September 20 from Italy’s national and provincial governments to move forward with its citizen’s ID card project.
Specifically, LaserCard said it expects the Italian government to issue an international tender for a large quantity of data capture enrollment systems in the current quarter, which will enable significant increases in card issuance rates.
“Over the last couple of weeks investor sentiment has been negative,” said Lazard Capital analyst Nick Andrewes who currently has a “buy” rating on the stock. “However, given that [LaserCard] received the request for proposal for card drives that investors have been waiting on, shares are rallying.”
According to Andrewes, the Italy contract is their biggest, and could be worth up to $40 million a year. The project was launched about two years ago but a change in the Italian government caused the program to stall for a bit.
Andrewes said he thinks that the project will get fully off the ground to the point where large quantities of ID cards are issued by the end of the company’s fiscal fourth quarter, or beginning of its fiscal first quarter for 2009. Andrewes says this is when the company should turn profitable. The analyst has a target price of $16 and said the contract will serve as a major catalyst for the stock.
Separately, LaserCard reported a narrowed loss for its second quarter of fiscal 2008 after the close Thursday. For the three months ended Sept. 30, the small-cap recorded a net loss of $498,000, or $0.04 per diluted share, compared with a net loss of $2.7 million or $0.23 per diluted share, in the same quarter last year. Four analysts polled by Thomson Financial were on average expecting a net loss of $0.11 per share.
Revenues for the second quarter of fiscal 2008 were $10.7 million, compared with $6.3 million in the same quarter a year ago. The consensus on Wall Street was for revenues of $9.8 million.
Shares of LaserCard rose 13.84%, or $1.24, to $10.20 at 1:54 p.m. ET. Shares of LaserCard have been trading in the range of $8.80 to $14.02 for the past 52 weeks.
