Zacks senior software analyst Steve Biggs, CFA has come out with an update on iPass, Inc. (IPAS), in which he has advised caution and issued a Hold rating on the company.  We excerpted the following details:

'iPass provides software-enabled solutions that help enterprises connect their remote and mobile workers. The company had historically relied on revenue from dial-up network access billed on a per-minute basis. As availability of broadband alternatives has grown, the company has diversified its revenue base by expanding into broadband access and fee-based services. The company has also grown its software and services revenue with its focus on security, or device management service (formerly called endpoint management).

'iPass Inc. has been gaining traction on subscription-based initiatives, with dial-up revenue falling below half of the total revenue. However, access is a competitive market and even broadband revenues are likely to be at risk over the longer-term. Until the company is able to generate meaningful revenue and profit growth from other subscription services, we believe the stock price will remain relatively flat.

'Shares of iPass are currently trading at 1.3x our 2008 sales estimate, representing a discount to the industry mean and the S&P. Although we believe that iPass's transition to its new business model still poses significant risks, the worst appears to be behind it.

'The company's subscription model has been gaining traction of late and dial-up is falling as a percentage of revenue. Although we are positive on these initiatives and the stock could offer upside if the new business model is successful, we do not expect meaningful acceleration until the beginning of 2008 at the earliest and we believe the share price will stay close to current levels. We, therefore, maintain a Hold rating on iPass shares with a six-month target price of $4.50 representing a price-to-sales ratio of 1.3x our 2008 sales estimate.'