Needham & Company Reiterates Buy on GigOptix (GIG) Following 3Q Earnings Report
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Needham & Company reiterated a Buy rating and $3.50 price target on GigOptix (NYSE: GIG) following the company's 3Q earnings report. GigPeak reported 3Q16 revenue of $15.8MM and NG EPS of $0.05. Adjusted EBITDA was a record $4.6MM, above $4.0MM estimates. GIG guided 4Q16 revenue to $16.0-16.2MM, ahead of $16.0MM estimates. FY16 revenue guidance was increased modestly to ~$59MM.
Analyst Quinn Bolton commented, "GigPeak reported 3Q16 results that beat expectations across the board. Record 40G datacom shipments and a managed product sales mix drove upside to sales, NG GM, adjusted EBITDA and NG EPS. The company is beginning to see growing interest for higher speed products including its 100G NRZ and 200G PAM-4 driver and TIA solutions. Additionally, GIG has refocused its video compression business (Magnum) on the delivery of software solutions that run on third party processors and FPGAs and expects to drive growth into 2017. Despite a double-digit organic revenue growth rate and a NG GM of >70%, GIG shares trade at 2.3x 2017E sales, a significant discount to its peers and to other high-gross-margin semiconductor companies that trade at a median EV of 3.6x 2017 sales. Reiterate Buy and $3.50 PT."
Shares of GigOptix closed at $2.61 yesterday.
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