Needham & Company Starts Sigma Designs (SIGM) at Hold; Remaining On The Sidelines as Headwinds Pressure N-T

Needham & Company initiates coverage on Sigma Designs (NASDAQ: SIGM) with a Hold.

Needham analyst says, "Sigma Designs reported disappointing F1Q12 results and guided for F2Q12 (July) revenue substantially below our and consensus expectations as it navigates a product transition period in the IPTV STB market. Lower priced SMP8650/8670 products are being designed into 2nd-gen boxes, replacing first generation sockets based on the higher priced SMP8634. Connected home was strong as HomePNA shipments surged and Z-Wave saw growing traction across multiple customers. However, as connected home sales pause following a standout F1Q12 and IPTV STB SoCs continue their transition, F2Q12 will be significantly softer than our expectations and SIGM will likely not see top-line strength before F4Q12. The company continues to see strong design win momentum for Z-Wave and 2nd-gen IPTV STB SoCs and expects to grow revenue F2H12 vs. F1H12. We recommend investors remain on the sidelines until visibility improves into this revenue recovery."

For more ratings news on Sigma Designs click here and for the rating history of Sigma Designs click here.

Shares of Sigma Designs closed at $11.00 yesterday.

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