Needham & Company Reiterates Buy on Sequans Communications (SQNS) Following Equity Offering
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Needham & Company reiterated a Buy rating and $3.00 price target on Sequans Communications (NYSE: SQNS) following the company's follow-on offering of primary ADSs. Sequans expects to receive net proceeds of $22.9MM, and intends to use the proceeds from the offering for general corporate purposes.
Analyst Quinn Bolton commented, "Last Thursday, Sequans completed a follow-on offering of primary ADSs, raising an estimated $26.5MM of net proceeds (assuming exercise of the underwriters' overallotment option). We believe the successful offering completely removes the near-term balance sheet concerns for not only investors but also customers as the company is now fully funded through the ramp of its CAT-M1/NB1 Monarch solution and cash flow breakeven in 2017. With the balance sheet overhang removed, we encourage investors to focus on the company's leadership position in narrowband LTE solutions (including CAT-1 and CAT-M1/NB1) for the IoT and M2M markets and its increasing visibility in the LTE home router/portable router segments that should drive sequential revenue growth through year-end and meaningful Y/Y revenue growth in 2017. Reiterate Buy."
Shares of Sequans Communications closed at $1.70 yesterday.
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