• by Mark Walsh  @markfwal, December 9, 2010

Needham & Co. issued a report today initiating coverage of AOL with a buy rating and $35 price target--the company is currently trading at about $25.50. Martin Why? Because employees aren't stampeding out the door. "We think the best question for AOL is Why aren’t the employees leaving? Tech employees are the most innovative, hard-working, risk-tolerant group on Earth. They are also mobile," wrote analyst Laura Martin.

She argues that AOL insiders have a better handle on the company's prospects than Wall Street, where nine of 10 sell-side analysts have a hold or sell rating on AOL. "Such strong consensus alignment gives us solace that AOL's share price captures the risks, but probably underestimates the upside," noted Martin. Of course, with the buyout and layoffs at AOL in the last year, a lot of employees have already left the company. And if staffers not running for the exits is the best case to make for AOL, does that really inspire confidence?