Wedbush Cuts Price Target on Cavium Networks (CAVM), Lowers Estimates on New Guidance
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Price: $86.23 --0%
Rating Summary:
12 Buy, 18 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
12 Buy, 18 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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Wedbush is reaffirming its Neutral rating on shares of Cavium Networks (NASDAQ: CAVM) while lowering its price target from $35 to $29 due to lowered guidance.
The company reduced its third quarter revenue guidance from $73-$74 million or 2-3 percent gain to $67-$69 million or a 6-4 percent loss. The lowered revenue guidance is largely due to weaker than expected revenue from the enterprise market and recognized revenue from software service.
Management reiterated its third quarter gross margin range of 65-66 percent and its OpEx guidance range of $29.7-$30 million.
As a result of the new guidance, Wedbush cut its Q3 EPS estimate from $0.33 to $0.26 and its Q4 estimate from $0.33 to $0.25. To go inline, its 2011 EPS estimate is now $1.17, down from $1.31 previously. Revenue for Q3 was cut from $73.6 million to $67.7 million and its 2011 revenue estimate from $284 million to $271 million.
For 2012, the firm lowered its EPS estimate from $1.52 to $1.27 and its revenue estimate from $347 million to $318 million.
An analyst at Wedbush comments, "Although we believe Cavium will benefit from the continued ramp of design wins in 2012 driven by the infrastructure buildout and the connected home/office markets, until we have better visibility on demand trends in enterprise and consumers markets, we recommend investors stay on the sidelines."
For more ratings news on Cavium Networks click here and for the rating history of Cavium Networks click here.
Shares of Cavium Networks closed at $31.21 yesterday.
The company reduced its third quarter revenue guidance from $73-$74 million or 2-3 percent gain to $67-$69 million or a 6-4 percent loss. The lowered revenue guidance is largely due to weaker than expected revenue from the enterprise market and recognized revenue from software service.
Management reiterated its third quarter gross margin range of 65-66 percent and its OpEx guidance range of $29.7-$30 million.
As a result of the new guidance, Wedbush cut its Q3 EPS estimate from $0.33 to $0.26 and its Q4 estimate from $0.33 to $0.25. To go inline, its 2011 EPS estimate is now $1.17, down from $1.31 previously. Revenue for Q3 was cut from $73.6 million to $67.7 million and its 2011 revenue estimate from $284 million to $271 million.
For 2012, the firm lowered its EPS estimate from $1.52 to $1.27 and its revenue estimate from $347 million to $318 million.
An analyst at Wedbush comments, "Although we believe Cavium will benefit from the continued ramp of design wins in 2012 driven by the infrastructure buildout and the connected home/office markets, until we have better visibility on demand trends in enterprise and consumers markets, we recommend investors stay on the sidelines."
For more ratings news on Cavium Networks click here and for the rating history of Cavium Networks click here.
Shares of Cavium Networks closed at $31.21 yesterday.
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