DTS Inc. (DTSI): Raising PT to $37 After a Strong Quarter - B.Riley

August 9, 2016 7:51 AM EDT
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Price: $42.52 --0%

Rating Summary:
    3 Buy, 9 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 16 | Down: 26 | New: 28
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B. Riley analyst, Eric Wold, reiterated his Buy rating on shares of DTS Inc. (NASDAQ: DTSI) after the company reported better-than-expected Q2 revenues and EPS that were driven by continued market share gains within the key Mobile and Automotive segments (which even drove handset license revenues to nicely exceed minimum guarantee levels).

The analyst believes the combination of multi-year automotive model visibility stemming from the iBiquity acquisition along with the content ecosystem is somewhat forcing adoption of DTSI technology within the mobile industry and will help to drive ramping high-margin revenue growth and cash flows for DTSI in the years ahead.

The price target of $37.00 is increased from $34.00.

DTS Inc. (DTSI) reported better-than-expected Q2 revenues and EPS that were driven by continued market share gains within the key Mobile and Automotive segments (which even drove handset license revenues to nicely exceed minimum guarantee levels). We continue to believe the combination of multi-year automotive model visibility stemming from the iBiquity acquisition along with the content ecosystem somewhat forcing adoption of DTSI technology within the mobile industry will help to drive ramping high-margin revenue growth and cash flows for DTSI in the years ahead. And along with management increasing 2016 guidance earlier than we anticipated (although we have always believed the guidance to be conservative), management played into our thesis with the initiation of a regular dividend that is expected to grow as cash flow trends improve.



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