Needham & Company Downgrades Cavium Networks (CAVM) to Buy; Wait For Revenue Growth to Re-Accelerate
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Price: $86.23 --0%
Rating Summary:
12 Buy, 18 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
12 Buy, 18 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company downgraded Cavium Networks (NASDAQ: CAVM) from Strong Buy to Buy, price target lowered from $43 to $38.
Needham analyst says, "CAVM reported 3Q11 results in-line with its 9/22 pre-announcement. However, management guided 4Q11 sales to decline 8%-10% Q/Q, well below our and the Street consensus. Factors affecting 2H11 results include the Cisco (N/R) hub transition, inventory depletion, soft demand from the enterprise and wireless infrastructure markets and a lack of major new program ramps. As we believe the above factors are either timing or macroeconomic in nature, we do not believe Cavium’s core market position or long-term fundamental growth story has changed. However, given year-over-year revenue is likely to decelerate through 2Q12, we are concerned that CAVM’s valuation multiple may compress in the near-term. As such, we are downgrading the shares to Buy as we await a re-acceleration of revenue growth in 2H12. We believe a Buy rating is justified by the company’s leadership position in multi-core communication processors."
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 $32.69 yesterday.
Needham analyst says, "CAVM reported 3Q11 results in-line with its 9/22 pre-announcement. However, management guided 4Q11 sales to decline 8%-10% Q/Q, well below our and the Street consensus. Factors affecting 2H11 results include the Cisco (N/R) hub transition, inventory depletion, soft demand from the enterprise and wireless infrastructure markets and a lack of major new program ramps. As we believe the above factors are either timing or macroeconomic in nature, we do not believe Cavium’s core market position or long-term fundamental growth story has changed. However, given year-over-year revenue is likely to decelerate through 2Q12, we are concerned that CAVM’s valuation multiple may compress in the near-term. As such, we are downgrading the shares to Buy as we await a re-acceleration of revenue growth in 2H12. We believe a Buy rating is justified by the company’s leadership position in multi-core communication processors."
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 $32.69 yesterday.
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