Positive analyst activity surrounding Macromedia follows its announcement of significant income gains and a new CEO earlier this week.

Analysts at RBC Capital Markets, Piper Jaffray and Adams Harkness all raised estimates (to outperform or buy) and target prces on the company's stock yesterday.

Analysts at Robert Baird (who also raised estimates) observed that it expects Macromedia to "post above-average growth in the next two-to-three years". Analysts also observe "stable revenues in the company's core Web developer and designer business".

Macromedia revealed net income up 49 per cent on 15 per cent revenue growth after markets closed on January 19. The company accrued net revenue of $108.6 million.

New leader, new focus

The company also announced its appointment of chief operating officer Stephen Elop as new CEO. Former CEO Rob Burgess is stepping down from the role, but will continue as executive chairman and chairman of the board.

Burgess said: "We had solid results in all three of our businesses and across all of our regions. Our core products are doing well, our new initiatives like Breeze and Flex are really starting to take off, and mobile is set to explode."

Major MX updates in the frame

Keybanc Capital analyst Mark Schappel told CBS MarketWatch: "We think the stock could pull back further in the coming months as the new CEO makes his mark and as investors move in and out of the stock in advance of the next release of the MX product family, which we expect to be available later in the summer."

Macromedia's chief financial officer Betsey Nelson confirmed software upgrades for the company's industry-standard Web design/development tools, saying 2006 earnings would benefit from "a major new release" of MX products "later in summer".

For the quarter ending March 31, 2005, Macromedia expects net revenues between $108-$113 million, with a pro forma operating profit margin of between 15-17 per cent.

Macromedia expects its revenues to exceed $500 million in its current (2006) financial year.
Responding to the results and analyst recommendations, Macormedia shares climbed 22 per cent on trading yesterday.