Needham & Company Downgrades Ruckus Wireless (RKUS) to Hold

February 13, 2013 7:51 AM EST Send to a Friend
Get Alerts RKUS Hot Sheet
Price: $11.46 -3.13%

Rating Summary:
    15 Buy, 8 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 3 | Down: 17 | New: 2
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Needham & Company downgraded Ruckus Wireless (NYSE: RKUS) from Buy to Hold despite solid Q4 results.

The firm comments, "Ruckus delivered a solid beat in its first quarter as a public company, exceeding our revenue estimate by 3% and beating EPS by $0.02, and offered an out quarter guide slightly better than we had been forecasting. We continue to like Ruckus' fundamentals and feel the company continues to have strong momentum in both its enterprise and carrier facing businesses, good potential for upside to our current estimates, and remains one of very few publicly traded ways to play the high growth carrier Wi-Fi infrastructure market. That said, the 65%+ post-IPO move in the shares has moved them well past our prior $21 PT to a valuation level – 82x ex-cash 2014 EPS and EV/’14 Sales of 7.0x – that makes it challenging for us to justify a PT with sufficient upside to continue with a Buy rating. As such, we are downgrading the shares to Hold, while acknowledging they may continue to be appropriate for momentum-oriented, less valuation sensitive investors."

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

Shares of Ruckus Wireless closed at $25.87 yesterday.


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