Kaufman Bros. Initiates Coverage on Volterra (VLTR) with a Buy; Steady Outgrowth into Large Market Opportunity
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Kaufman Bros. initiates coverage on Volterra (NASDAQ: VLTR) with a Buy rating. Price target $20.
Kaufman analyst says, "VLTR's power semiconductor products target the $3.4 billion voltage regulator market. According to iSuppli, this market is forecast to grow 16% annually to nearly $6.0 billion by 2013. We believe VLTR is positioned to continue the strong growth trend it has achieved the past few years (CAGR 45%) in the regulator market. For 2010, we project revenue growth of +30% Y/Y, well above the expected low-double-digit Y/Y unit growth expected for PCs...Within this growing market, we estimate that VLTR's products will address a $2 billion market opportunity by the year 2012. We believe that more than half the opportunity will be in notebook and consumer portables, VLTR's fastest growing segments. We believe these segments are growing at a 20+% annual rate and that VLTR can outgrow with share gains. Another 25% of the addressable market opportunity is in the server/storage segment, which we believe is growing at a 12% annual rate. We believe VLTR is very well positioned here, with increasing content on newer Intel-based server (2009 Thurley, 2011 Romley) and notebook (2008 Montevina, 2010 Calpella, Future Huron River) platforms. We believe the remaining market opportunity in communications (9% growth rate) and graphics (4% growth rate) represents steady revenue streams for the company over the next few years. In the last 12 months, VLTR derived 63% of its revenue from the server/storage markets, 11% from the notebook market, 12% from communications and 15% from graphics processors (GPUs)....we currently expect some potential for upside from this segment. For 4Q09, we have modeled revenue of $32 million (+7.8% Q/Q) and EPS of $0.20. For 2010, we expected revenue of $133.3 million (+30% Y/Y) and EPS of $0.91."
To see all the upgrades/downgrades on shares of VLTR, visit our Analyst Ratings page.
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