Needham & Company Defends OmniVision Technologies (OVTI); Accumulate on Weakness - iPhone 5 Prospect Seems Promising

Needham & Company maintains a 'Buy' on OmniVision Technologies (NASDAQ: OVTI) price target of $24.00.

Analyst, Rajvindra S. Gill, said, "OVTI reported better than expected F4Q12 revenue and provided F1Q13 revenue guidance 12% higher than consensus at its midpoint. On the downside, Non-GAAP GM was 410bps below our estimate due to continued inventory writedowns. We expect gross margins to remain under pressure due to high BSI-2 production costs and further potential inventory writedowns. However, we continue to see several quarters of top-line beat and raises for OVTI as demand for its 8MP sensors steadily increases. Given the uptick in 8MP shipments along with the substantial increase in revenue guidance and BSI-2 ramp, we believe OVTI’s prospect of winning the main camera socket in the next-gen iPhone seems promising. With huge demand expected for the iPhone 5 (Nasdaq: AAPL) (we forecast 140MM total iPhone shipments in CY13 following the iPhone 5’s 2H12 expected release) a design win could provide substantial upside to OVTI shares."

"Our FY13 and FY14 ests move to $1.12BN/$1.60 (vs. $975MM/$1.60) and $1.12BN/$2.05 (vs. $1.1BN/$2.00), respectively."

For an analyst ratings summary and ratings history on OmniVision Technologies click here. For more ratings news on OmniVision Technologies click here.

Shares of OmniVision Technologies closed at $16.18 yesterday.

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