Brigantine Advisors Initiates Coverage on DragonWave (DRWI) with a Buy; Breakout Technology Story
DRWI Hot Sheet
Rating Summary:2 Buy, 8 Hold, 4 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Brigantine Advisors initiates coverage on DragonWave, Inc. (Nasdaq: DRWI) with a Buy rating. Price target $16.
Brigantine analyst says, "We view the company as well-positioned to capitalize on a $6B worldwide market. Wireless microwave offers a lower cost alternative to traditional backhaul methods, which are less efficient in handling the shift from legacy to IP-based traffic. With operators under pressure to drive ROI and rationalize business models, and new technology transitions (e.g. LTE) driving increased mobile traffic, we view the market at an inflection point for rapid growth...We are bullish on accelerating trends in wireless data traffic and DragonWave’s competitive positioning. With the shares at a 14.5x our F2011 EPS estimate of C$0.82, we find the risk/reward very attractive. Our $16 target is based on a 18x multiple on C2010 EPS, plus estimated cash per share (net of IPO) of C$2.47 (exchange rate of $0.95 per Canadian dollar). Our price target values DragonWave at over a 40% discount to competitors Ceragon (Nasdaq: CRGN) and Harris Stratex (Nasdaq: HSTX), factoring in appropriately, in our view, for the significant customer concentration risk."
To see all the upgrades/downgrades on shares of DRWI, visit our Analyst Ratings page.
DragonWave Inc. (DragonWave) is engaged in the business of developing broadband wireless backhaul equipment.
Brigantine analyst says, "We view the company as well-positioned to capitalize on a $6B worldwide market. Wireless microwave offers a lower cost alternative to traditional backhaul methods, which are less efficient in handling the shift from legacy to IP-based traffic. With operators under pressure to drive ROI and rationalize business models, and new technology transitions (e.g. LTE) driving increased mobile traffic, we view the market at an inflection point for rapid growth...We are bullish on accelerating trends in wireless data traffic and DragonWave’s competitive positioning. With the shares at a 14.5x our F2011 EPS estimate of C$0.82, we find the risk/reward very attractive. Our $16 target is based on a 18x multiple on C2010 EPS, plus estimated cash per share (net of IPO) of C$2.47 (exchange rate of $0.95 per Canadian dollar). Our price target values DragonWave at over a 40% discount to competitors Ceragon (Nasdaq: CRGN) and Harris Stratex (Nasdaq: HSTX), factoring in appropriately, in our view, for the significant customer concentration risk."
To see all the upgrades/downgrades on shares of DRWI, visit our Analyst Ratings page.
DragonWave Inc. (DragonWave) is engaged in the business of developing broadband wireless backhaul equipment.
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