Needham & Company Reiterates Buy on Cavium (CAVM) Following Solid 3Q
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Needham & Company reiterated a Buy rating and $66.00 price target on Cavium Networks (NASDAQ: CAVM) following the company's 3Q earnings report. CAVM reported 3Q16 revenue and NG EPS of $168.1MM/$0.43, ahead of $162MM/$0.39 estimates. Strength was seen across nearly all of CAVM's new products during the quarter. ThunderX is now at five data centers in Asia and the U.S., with some at full deployment while others are in late stage testing or in development. CAVM guided 4Q16 revenue to increase to $223MM-$226MM, above $222MM estimates.
Analyst Quinn Bolton commented, "CAVM posted its second consecutive beat and raise quarter with strength in the core business driving upside. QLogic revenue was also ahead of expectations. Both new products and core Nitrox and Octeon products tracked nicely during 3Q and are expected to drive the core business into 4Q. Importantly, we see four (ThunderX, Xpliant, Fusion M and LiquidIO 2) of the company's five New Products growing Q/Q into 4Q16. With increased confidence in the core business and the successful ramp of New Products, we believe the recent string of disappointing quarters is behind us. We reiterate our Buy rating and $66 price target based on our DCF model."
Shares of Cavium Networks closed at $56.63 yesterday.
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