Needham & Company Maintains a 'Buy' on RadiSys (RSYS); Solid 3Q11 Results, But Weak 4Q Guide; Unchanged 2012 Guide Likely Ambitious
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Price: $1.72 --0%
Rating Summary:
2 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
2 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company maintains a 'Buy' on RadiSys (NASDAQ: RSYS) price target lowered by $1 to $9.00.
Needham analyst says, "While we remain optimistic regarding the long-term growth and earnings prospects of Radisys with its recently closed acquisition of Continuous Computing, which should serve to increase the company’s non-Legacy growth profile and improve margins, the company’s weaker than expected 4Q11 guidance demonstrates that the path towards a $90MM/quarter company with 36-37% GM and 10% OM is unlikely to be linear. The historic downside volatility of the company’s legacy NSN business combined with a choppy telco cap-ex environment are likely to result in at least a couple of lackluster quarters. However, we continue to expect that as the company executes on its cost reduction plans and sees its new design wins ramp, performance is likely to improve sharply in 2H12."
"We are trimming 4Q11 in line with guidance and reducing 2012 somewhat below guidance given the risks inherent in the large implied 2H ramp. Our 2011 estimates go to $332MM/$0.47 NG EPS. For 2012, our estimates go to $340MM/$0.70 NG EPS from $349MM/$0.80."
For more ratings news on RadiSys click here and for the rating history of RadiSys click here.
Shares of RadiSys closed at $6.38 yesterday.
Needham analyst says, "While we remain optimistic regarding the long-term growth and earnings prospects of Radisys with its recently closed acquisition of Continuous Computing, which should serve to increase the company’s non-Legacy growth profile and improve margins, the company’s weaker than expected 4Q11 guidance demonstrates that the path towards a $90MM/quarter company with 36-37% GM and 10% OM is unlikely to be linear. The historic downside volatility of the company’s legacy NSN business combined with a choppy telco cap-ex environment are likely to result in at least a couple of lackluster quarters. However, we continue to expect that as the company executes on its cost reduction plans and sees its new design wins ramp, performance is likely to improve sharply in 2H12."
"We are trimming 4Q11 in line with guidance and reducing 2012 somewhat below guidance given the risks inherent in the large implied 2H ramp. Our 2011 estimates go to $332MM/$0.47 NG EPS. For 2012, our estimates go to $340MM/$0.70 NG EPS from $349MM/$0.80."
For more ratings news on RadiSys click here and for the rating history of RadiSys click here.
Shares of RadiSys closed at $6.38 yesterday.
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