Needham & Company Reiterates Buy on Sigma Designs (SIGM) Following Solid 2Q Report
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Needham & Company reiterated a Buy rating and $13.00 price target on Sigma Designs (NASDAQ: SIGM) following the company's 2Q earnings report. SIGM reported sales of $61.3MM, in-line with $61.0MM estimates. NG EPS was $0.07, above $0.01 estimates, driven by stronger than expected NG GM. NG GM came in at 49.9%, above the high end of guidance.
Analyst Quinn Bolton commented, "SIGM reported better than expected NG EPS in F2Q17 but guided for weaker F3Q revenue. The highlight for the quarter was NG GM, which came in 330bps above our expectations and drove much of the EPS upside. The strong GM was mitigated by a further delay in the IoT revenue ramp, with the segment now expected to rebound next quarter. Management continues to diversify its Connected SmartTV business with the recent announcements of its new UHD TV Sx8 SoC and a joint development collaboration agreement with Telechips for IP streaming STBs, which should drive future revenue growth. We are encouraged by the stronger than expected GM and await the IoT revenue ramp. We maintain our Buy rating and $13 PT."
Shares of Sigma Designs closed at $8.30 yesterday.
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