Sigma Designs (SIGM): Cutting PT On Weak Guidance - Baird
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Baird analyst, Tristan Gerra, reiterated his Outperform rating on shares of Sigma Designs (NASDAQ: SIGM) and sees several growth drivers into F2018 including an initial mobile IoT revenue ramp, new IoT design wins, G.hn, and continued 4K ramp.
For the remainder of F2017, the analyst believes the IoT outlook appears to track slightly above management’s expectation while TV is tracking somewhat below. Strong gross margin performance in the quarter combined with good operating expenses control should provide continued operating leverage going forward.
That said, the F3Q17 revenue guidance midpoint of $63.5 million was below consensus of $67.2 million. This is somewhat offset by the pro forma gross margin guidance midpoint of 48.5% which is above consensus of 47.0%. On the weaker guidance, the price target drops to $9 from $10.
Shares of Sigma Designs closed at $8.30 yesterday.
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