Needham & Company Lowers Estimates on Silicon Image (SIMG), But Sum-of-the-Parts Analysis Revels Significant Upside at Current Levels
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Price: $7.28 --0%
Rating Summary:
1 Buy, 2 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
1 Buy, 2 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company reiterates a 'Buy' on Silicon Image (NASDAQ: SIMG) price target lowered from $8.50 to $7.00.
Needham analyst says, "We are lowering estimates on SIMG due to continued demand degradation in DTVs and specific weakness at HTC (N/R), which SIMG has exposure to. Despite the near-term risk to estimates, the 30% share price decline since earnings call reflects most of these risks. Moreover, our sum-of-the parts analysis, which breaks SIMG’s revenue into its three parts - consumer electronics, mobile/SiBeam and licensing IP royalty, reveals that the current market cap is valuing the CE and mobile business at effectively zero. In other words, the stock price is only including the net cash (42% of market cap) and a conservative multiple on the recurring IP royalty revenues. In 2012, we expect accelerating penetration of MHL across the top handset OEMs and a normalized DTV environment."
"We are lowering our near-term 4Q11/1Q12 ests to $58.4MM/$0.02 (vs. $54.4MM/$0.04) and $50.0MM/$(0.01) (vs. $55.0MM/$0.02), respectively. Our 2011/2012 estimates move to $217.3MM/$0.16 (vs. $220.3MM/$0.17) and $260.0MM/$0.30 (vs. $280.0MM/$0.40), respectively. Our $7 price target implies a 15x 2012 Non-GAAP EPS of $0.30, plus $1.86 net cash."
For an analyst ratings summary and ratings history on Silicon Image click here. For more ratings news on Silicon Image click here.
Shares of Silicon Image closed at $4.52 yesterday.
Needham analyst says, "We are lowering estimates on SIMG due to continued demand degradation in DTVs and specific weakness at HTC (N/R), which SIMG has exposure to. Despite the near-term risk to estimates, the 30% share price decline since earnings call reflects most of these risks. Moreover, our sum-of-the parts analysis, which breaks SIMG’s revenue into its three parts - consumer electronics, mobile/SiBeam and licensing IP royalty, reveals that the current market cap is valuing the CE and mobile business at effectively zero. In other words, the stock price is only including the net cash (42% of market cap) and a conservative multiple on the recurring IP royalty revenues. In 2012, we expect accelerating penetration of MHL across the top handset OEMs and a normalized DTV environment."
"We are lowering our near-term 4Q11/1Q12 ests to $58.4MM/$0.02 (vs. $54.4MM/$0.04) and $50.0MM/$(0.01) (vs. $55.0MM/$0.02), respectively. Our 2011/2012 estimates move to $217.3MM/$0.16 (vs. $220.3MM/$0.17) and $260.0MM/$0.30 (vs. $280.0MM/$0.40), respectively. Our $7 price target implies a 15x 2012 Non-GAAP EPS of $0.30, plus $1.86 net cash."
For an analyst ratings summary and ratings history on Silicon Image click here. For more ratings news on Silicon Image click here.
Shares of Silicon Image closed at $4.52 yesterday.
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