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Volterra (VLTR) New Solar Product Provide Upside Bias - Needham & Company

June 13, 2013 7:43 AM EDT Send to a Friend
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Price: $22.97 --0%

Rating Summary:
    7 Buy, 12 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 34 | Down: 12 | New: 35
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Needham & Company reiterated its Buy rating on Volterra Semiconductor (NASDAQ: VLTR) Thursday but trimmed its price target from $21 to $19 following meetings with the CFO and CTO. The firm notes the new solar product has upside while communication revenue is tracking lower than expected.

Analyst Vernon Essi, Jr. comments, "Yesterday we visited with the CFO and CTO of VLTR to discuss business conditions and get an overview of the new solar product. We believe VLTR's Energy initiatives (entirely solar near term) have upside bias to the financial model in 2014 and that our prior expectation of above-market growth rates for Communications are proving too optimistic. We adjusted our model to reflect these bipolar dynamics, reducing our revenue/EPS estimates for 2013E from $153M/$0.90 to $151M/$0.85 and our 2014E from $163M/$1.25 to $158M/$1.10. However, our thesis remains intact: if VLTR can demonstrate modest growth in enterprise server and any sign of life in its cloud strategy, we would expect the shares to show appreciable upside from current levels. Finally, notebook is being de-emphasized by investors and despite declines in Street estimates for this low-GM segment, the consensus model doesn't reflect GM gains a result. Thus we believe consensus EPS is too low for 2014 as reflected in our above consensus estimate. We lower our price target from $21 to $19 and reiterate our Buy rating."

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

Shares of Volterra Semiconductor closed at $13.38 yesterday.




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