Clinton, Moema in Focus for Solazyme's (SZYM) Q1 Report - Cowen

Cowen and Company offers a preview of Solazyme's (Nasdaq: SZYM) Q1 report. The firm has Solazyme at Outperform with a price target of $18.

Analyst Robert Stone sees Solazyme posting Q1 loss of $.43 with revenue of $13 million, while consensus views are at a loss of $.33 per share with revs of $14.3 million. The analyst is also looking for operating expenses of $36 million, roughly 7 percent above consensus estimates.

Stone noted the following:

• SZYM shares have pulled back about 12% in the last month since closing offerings of notes and common stock, underperforming in a weak tech market. We believe confirmation of a successful startup at Moema should be a big trigger. While a share price adjustment to dilution is simple arithmetic, we believe the larger significance of the deals is that more capacity expansion news should follow soon after Clinton and Moema have reached a satisfactory stage. There should also be more customer/offtake news.

• SZYM triglyceride oils may be used as a replacement for incumbent plant or petroleum sources. Even in this case, it should offer supply chain benefits, with a more consistent, year-round output (vs. annual crops with variations from location and climate). However, we believe a bigger, better margin opportunity is to develop improved functional properties for ingredients, such as frying oil that lasts longer with no trans fats or better nutritional food ingredients. The highest margin opportunity should be in direct products, such as the Encapso drilling lubricant, about which we expect more details.

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

Shares of Solazyme closed at $10.37 yesterday.

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