Cavium (CAVM) Results Hook Investors but Not Everyone is Biting

Shares of Cavium (Nasdaq: CAVM) are moving higher today in response to the company's earnings report. While clearly positive, analysts at MKM Partners aren't biting. They reiterated a Neutral rating with a price target of $27.00 on Cavium stock.

"Sales continue to bounce back following a three-quarter run of bad news, and CAVM is clearly a technology leader, but our model suggests that we won't see $2 EPS even excluding stock-based compensation until 2015 – we thus struggle to see how the stock will grow into current valuation based on margin trajectory and our TAM analysis," said analyst Daniel Berenbaum.

From his point of view, the company has a ways to go before it can grow into valuations.

Commenting on a potential takeover of the company, Berenbaum said "Broadcom (Nasdaq: BRCM) already spent on NETL, Marvell (Nasdaq: MRV)L has its own problems, and if Qualcomm (Nasdaq: QCOM) wanted to enter the infrastructure business, it would likely seek a company with a broader portfolio, so we're not sure if there is a logical acquirer.”

For an analyst ratings summary and ratings history on Cavium Networks click here. For more ratings news on Cavium Networks click here.

Shares of Cavium Networks closed at $29.90 yesterday.

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