Needham & Company Maintains a 'Hold' on Smith Micro (SMSI); Looking for New Product Ramp to Provide Visibility

Needham & Company maintains a 'Hold' on Smith Micro Software (NASDAQ: SMSI).

Needham analyst says, "SMSI shares have plummeted in the wake of the company’s disappointing YTD results and outlook, down over 90% for the year and hitting new 52-week lows daily. There are multiple issues facing the company including: 1) sluggish ramp of Verizon (NYSE: VZ) (N/R) LTE subs; 2) cannibalization of Connection Manager sales by a shift toward mobile hotspots (pucks and smart phones) from dongles; and 3) competitive threats from lower cost competitors (though we don’t think they have played a meaningful role in recent weakness). With that said, it remains possible that over time the company’s Mobile Network Director and Experience Manager could become major revenue drivers for 2012. If we can gain visibility to this occurring, we will reconsider our rating."

"Our revenue is largely unchanged as we expect new product revenue to slowly grow throughout 2012, while our opex is trimmed due to the company’s accelerated restructuring. 2011 goes to $62.5MM/($0.67) PF EPS from $63.6MM/($0.58) and 2012 goes to $68.1MM/($0.23) from $65.1MM/($0.35)."

For more ratings news on Smith Micro Software click here and for the rating history of Smith Micro Software click here.

Shares of Smith Micro Software closed at $1.28 yesterday.

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