Vonage Holdings Corporation (VG) Rises on Analyst Upgrade
Shares of Holmdel, New Jersey, based Vonage Holdings Corporation (VG) rose on Tuesday, against the backdrop of a marginally lower day in stocks overall. Vonage's stock was up 12.66%, rising 60 cents per share, to close at $5.34, on volume of 8,828,334 shares. The company's stock was upgraded from "hold" to "buy" by an analyst at Citigroup. The analyst also increased the stock’s price target substantially, causing the stock to rise in Tuesday afternoon trading.
On Tuesday afternoon an analyst at Citigroup increased the firm's rating of Vonage's stock. Analyst Michael Rollins raised his rating of the company to "buy" from "hold", a position that Citigroup had maintained for the past two years. They also increased the stock price target to $8 per share. The revised stock price target represents a 50% increase in the share price over Tuesday's closing level.
"We now see a favorable risk/reward scenario with an opportunity to improve business revenue growth, harvest consumer cash flow and generate yield at over 10% on our 2017 estimate," Rollins wrote in a note to clients.
The stock is currently trading at about the middle of its 52-week range of $3.82 to $7.42. However, the stock is up more than 36% in the past month, though it is still down about 7% year to date.
Also on Tuesday, Vonage Chief Executive Officer, Alan Masarek applauded the US Court of Appeals for the D.C. Circuit for upholding the Federal Communications Commission's net neutrality rules. The ruling means the FCC’s regulations preventing internet providers and wireless carriers from blocking or slowing access to a legal site, service, or app, or charging one for priority delivery, have been upheld.
Masarek said, "We applaud the decision by the D.C. Circuit to uphold the FCC's Open Internet rules. These rules ensure that the Internet remains an open platform for both innovative cloud communications services and all lawful content and communications. We are particularly heartened that the D.C. Circuit upheld applying the rules to wireless broadband. As a leader in cloud communications for business and residential communications solutions for consumers, we understand how critical an open Internet is in fostering innovation. Vonage remains steadfast as a supporter of the Open Internet rules..."
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