Piper Jaffray Remains Neutral Following LeapFrog Enterprises (LF) Delay of FQ1 Report

Piper Jaffray maintains a Neutral rating and $2.50 price target on LeapFrog (NYSE: LF) following the delay of LF's FQ1 report. Analyst Stephanie Wissink said that the delay creates room for speculation.

Wissink commented on LF, saying, "We are maintaining our Neutral rating and largely cautious view on LF shares. Fundamentally, we expect persistent weakness as the company's core namesake hardware business continues to mature, with growth rates having reversed and declines now accelerating. A delay in the FQ1 report further adds to concern and may signal forthcoming asset revaluation and the possibility of significant write-downs. We continue to believe that monetizing the value of the LeapFrog brand may best be suited for a strategic partner. But an alliance or take-out is not without significant risk, mainly due to the licensed nature of LeapFrog's software library. On balance, we are maintaining a discounted valuation construct, applying value to the sales base on a 0.55x basis - effectively giving credit to the brand equity, but not to any operating turnaround."

For an analyst ratings summary and ratings history on LeapFrog click here. For more ratings news on LeapFrog click here.

Shares of LeapFrog closed at $2.08 yesterday.

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