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Needham & Company Maintains a 'Hold' on OmniVision Technologies (OVTI); Lowering Estimates on Market Share Loss at the Next-Generation Apple iPad

January 20, 2012 10:43 AM EST
Get Alerts OVTI Hot Sheet
Price: $29.38 --0%

Rating Summary:
    2 Buy, 10 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 9 | Down: 9 | New: 42
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Needham & Company maintains a 'Hold' on OmniVision Technologies (NASDAQ: OVTI).

Needham analyst says, "We are lowering our estimates based on our checks that OVTI has lost the image sensor socket on Apple’s (Nasdaq: AAPL) next-generation iPad 3 HD to Samsung. We believe the iPad 3 will include a 5MP sensor for the back-camera and will support HD resolution. Our industry checks point to Samsung winning the socket based on price competitiveness rather than better quality/technology. Five megapixel sensors are a relatively mature technology, having existed in the marketplace for over two years, and therefore other competitors, such as Samsung, Aptina and Toshiba, have developed cost competitive sensors. On the iPhone 4S front, we still contend Sony is 100% sourced at Apple. However, OVTI is trying to ramp its BSI-2 yields to 70-80% in order to be qualified as the second source (sometime in C2Q). At this juncture, it’s still uncertain. Given the ~30% rise in the stock price off the bottom in November 30, 2011; we believe there are risks to the forward estimates. We would wait to be more constructive on the stock when we see more evidence that OVTI can regain its positioning at Apple, and see stabilization in the smartphone market."

"We are slightly lowering our FY12 estimates to $824.0MM/$1.38 (vs. $829.1MM/$1.40). Our FY13 estimates move to $740.0MM/$0.55 (vs. $780.0MM/$0.70)."

For an analyst ratings summary and ratings history on OmniVision Technologies click here. For more ratings news on OmniVision Technologies click here.

Shares of OmniVision Technologies closed at $13.72 yesterday.


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