Needham & Company Reiterates Buy on Sigma Designs (SIGM) Following Investor Meetings
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Needham & Company reiterated a Buy rating and $13.00 price target on Sigma Designs (NASDAQ: SIGM) after hosting management for investor meetings. Needham disagrees with a competitor's report issued last week that stated SIGM is at risk of being second sourced in Vizio 4K TVs once LeEco completes its acquisition of Vizio. Needham is also encouraged to hear that the company's Z-Wave backlog is building and is currently higher than 90 days ago.
Analyst Quinn Bolton commented, "We hosted SIGM management for investor meetings last Friday in New York. We come away from these meetings with increased conviction that the company is well positioned in the smart TV segment and that its Z-Wave business is poised to recover over the next several quarters as several Korean and Chinese services providers ramp, an outlook supported by a growing backlog of orders. Trading at EV of less than 1.0x CY17E revenue, SIGM carries the lowest EV/sales multiple in our coverage universe. We believe the shares are undervalued and expect SIGM’s valuation multiple will expand as the company delivers growth in its key Connected SmartTV Platforms and IoT segments."
Shares of Sigma Designs closed at $8.01 yesterday.
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