Zacks Analyst Blog Highlights: Alkermes, Inc., Eli Lilly & Co., The Ryland Group, Epicor Software Corp. and Synopsys Inc

Business Wire, Nov 3, 2008

CHICAGO -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Alkermes, Inc. (Nasdaq: ALKS), Eli Lilly & Co. (NYSE: LLY), The Ryland Group (NYSE: RYL), Epicor Software Corp. (Nasdaq: EPIC) and Synopsys Inc. (Nasdaq: SNPS).

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Here are highlights from Friday's Analyst Blog:

Alkermes Outlook Lukewarm

Alkermes, Inc. (Nasdaq: ALKS) is a drug delivery biotech company which utilizes specialized drug delivery technologies to develop drugs for the treatment of some major diseases. Its expertise in the area of drug delivery has allowed it to develop a pipeline of extended-release injectable and pulmonary drug products for the healthcare industry.

While Eli Lilly & Co.'s (NYSE: LLY) termination of the AIR Insulin program is a major blow to Alkermes' clinical pipeline, we are optimistic about a number of mid- to late-stage candidates. However, the latest we expect to see one of these candidates on the market is in 2010.

Ryland Group Headwinds Continue

The Ryland Group (NYSE: RYL) sells single-family detached homes -- as well as attached homes such as town homes and condominiums -- to the entry-level and to the first and second time move-up buyers.

Ryland reported a loss of $1.54 per share in 3Q08 compared to a loss of $1.30 per share in the prior-year, due to a decline in sales and margins as a result of the slowdown in the U.S. housing market. For the remainder of this industry downturn, we expect management to focus on generating cash flow, lowering inventory, reducing land investment and shedding overhead costs.

Epicor Software Performs In-Line

Epicor Software Corporation (Nasdaq: EPIC) reported Q308 GAAP revenues of $135.8 million were up 31.7% year over year and up 6.2% quarter over quarter. Non-GAAP revenues came in at $137.7 million. Pro-forma EPS of $0.19 was in line with our estimate.

The company has released Epicor 9 a business solution for next-generation Enterprise Resource Planning (ERP). Management expects to report revenues between $125 million and $140 million in Q408, down from Q3 mainly due to uncertain economic conditions which should constrain IT budgets of a lot of customers. Non-GAAP EPS is projected between $0.18 and $0.28.

Synopsys Warrants Caution

We maintain our Hold rating on the shares of Synopsys Inc. (Nasdaq: SNPS).

Shares of SNPS are currently trading at 9.9x our fiscal 2009 earnings estimate of $1.76, a huge discount to the industry mean. With excellent revenue visibility into its time based revenue model, a solid product portfolio and margin expansion, we believe the company will have a relatively healthy 2008 in spite of some challenges in the semiconductor market. However, we still have long-term concerns over constrained spending by semiconductor firms on design software as well as SNPS high level of options expenses relative to EPS.

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