Wedbush Morgan Initiates Coverage on Advanced Analogic Tech. (AATI) with a Hold

December 23, 2008 11:25 AM EST

Wedbush Morgan initiates coverage on Advanced Analogic Tech. (Nasdaq: AATI) with a Hold. Price target $3.

Wedbush analyst says, "AATI is a rapidly growing fabless analog IC company with unique IP that allows the company to carve out and address high margin segments within analog. This unique manufacturing process (1) results in smaller die, providing a compelling cost structure, and (2) enables a novel and efficient way to design multi-voltage chips. …and margin expansion: While gross margins are depressed in the near-term, we expect AATI to expand margins as mBCD ramps and product mix improves. Handset exposure to weigh: As AATI’s technology generates parts that are highly integrated and can fit in small spaces, it is no surprise that its handset exposure is significant – over 65% of sales in 1H08...Given the lack of visibility, deteriorating economic conditions, and slackening end-market demand, we are conservatively modeling 4Q08 revenue / EPS of $18.0mn / ($0.09) versus consensus of $18.6mn / ($0.10)."

Advanced Analogic Technologies Incorporated is a supplier of consumer, communications and computing electronic devices, such as wireless handsets, notebook and tablet computers, smartphones, camera phones, digital cameras, personal media players, Bluetooth headphones and accessories, notebook computers, digital televisions, set top boxes and displays.[SM]

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