MKM Partners Reiterates Buy on Infinera (INFN) After Meeting with Management

MKM Partners reiterated a Buy rating and $27.00 on Infinera Corp. (NASDAQ: INFN) following a meeting with the company's CEO and CFO. Analyst Michael Genovese said that the company sounds so good that some investors may think management is being promotional, however, he believes that management is actually rather transparent. Infinera's experience in the longhaul market positions it very well for success in the Metro market. Metro traffic demands are exploding and Cloud, Cable and Telco Service Providers are embracing coherent 100G in order to cope.

Genovese commented, "We are reiterating our Buy rating following a very upbeat meeting with the CEO and CFO yesterday on our bus tour. The company has the unique opportunity to triple its addressable market over the next 5 years to $15bn through multiple product entry into the Metro Optical market. Infinera has almost no current Metro revenue stream to cannibalize, and should be able to gain at least 15% share in the incremental $10bn market through its core competency of creating massive amounts of flexible and cost efficient bandwidth."

Genovese also added, "We are raising our 2016 revenue estimate by $155mn for Transmode and an additional $40mn for the new Metro Aggregation platform, bringing our new forecast to $1.16bn for Infinera. Our 2016 GM estimate increases by 30bps to 48.8% and our new 2016 OM estimate is 15.9%. We are increasing our 2016 INFN EPS forecast to $1.13 from $1.08."

For an analyst ratings summary and ratings history on Infinera Corp. click here. For more ratings news on Infinera Corp. click here.

Shares of Infinera Corp. closed at $21.03 yesterday.

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