RadiSys (RSYS) PT, Estimates Trimmed at Needham & Company; 2nd-Half Ramps Appears Intact

May 2, 2014 8:36 AM EDT
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Price: $4.45 -3.26%

Rating Summary:
    5 Buy, 0 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Needham & Company analyst Richard Valera cut estimates and his price target on RadiSys (NASDAQ: RSYS) to $5.00 (from $6.00) but maintained a Buy rating following mixed Q1 results although a 2nd-half ramp appears intact.

Valera commented, "While we find the incremental weakening of RSYS' audio conferencing business a bit disappointing, and this resulted in a trim to our EPS estimates, we came away from the 1Q report feeling RSYS is continuing to make solid progress in its important MRF business and is well positioned to see a strong ramp in 2H14 earnings driven by increased Software Solutions and benefit from its contract manufacturing restructuring, which could add~300bps of GM. While acknowledging some risk to our steep projected 2H ramp, we believe if RSYS can execute toward it the shares can work materially higher from current levels. Maintain Buy and $5 PT (was $6), or ~18x 2015E EPS."

The firm trims 2014 estimates, now $206MM and $0.07 NG EPS vs $208MM and $0.14 NG EPS. 2015 goes to $207MM/$0.28 from $212M/$0.32.

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

Shares of RadiSys closed at $3.22 yesterday.

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