Solazyme (SZYM) Sell-Off Overdone; Non-Material Impact Expected on Roquette Dissolution - Analyst
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Price: $2.15 --0%
Rating Summary:
5 Buy, 6 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 11 | New: 13
Rating Summary:
5 Buy, 6 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 11 | New: 13
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Shares of Solazyme (Nasdaq: SZYM) fell over 13 percent on Monday following news of a dissolved joint venture with Roquette Frères, S.A.
Raymond James thinks the sell-off might have been a bit of an overreaction, thinking that the headline report is neutral for shares and may even be a positive in the long run. Analyst Pavel Molchanov said, "Solazyme wanted to move more rapidly with scale-up than what Roquette was willing to do – a classic situation when a large strategic partner is working with a smaller technology provider...Solazyme’s management specifically cited disagreement on the scope and timing of phase 3 of the project, which would provide the scale for production economics to become more appealing. The decision was not related to market demand or technology issues, so be clear, this situation is totally different from the scale-up delays over the past year at Amyris (Nasdaq: AMRS) or Gevo (Nasdaq: GEVO)."
Molchanov continued, "Solazyme will leverage its production capacity in the U.S. and Brazil to fasttrack commercialization of algalin flour-based ingredients as compared to the JV’s timeline. Management highlighted that the gross margins for the ingredients are among the most attractive in Solazyme’s product portfolio, and the technology is commercial-ready."
Solazyme also had a wide-range of other partnerships, signing-on two additional partners this year alone.
Molchanov sees mostly non-cash and non-material charges with zero impact on FY13 revs guidance. He has Solazyme at Outperform and target price of $12.50.
For an analyst ratings summary and ratings history on Solazyme click here. For more ratings news on Solazyme click here.
Shares of Solazyme closed at $10.94 yesterday.
Raymond James thinks the sell-off might have been a bit of an overreaction, thinking that the headline report is neutral for shares and may even be a positive in the long run. Analyst Pavel Molchanov said, "Solazyme wanted to move more rapidly with scale-up than what Roquette was willing to do – a classic situation when a large strategic partner is working with a smaller technology provider...Solazyme’s management specifically cited disagreement on the scope and timing of phase 3 of the project, which would provide the scale for production economics to become more appealing. The decision was not related to market demand or technology issues, so be clear, this situation is totally different from the scale-up delays over the past year at Amyris (Nasdaq: AMRS) or Gevo (Nasdaq: GEVO)."
Molchanov continued, "Solazyme will leverage its production capacity in the U.S. and Brazil to fasttrack commercialization of algalin flour-based ingredients as compared to the JV’s timeline. Management highlighted that the gross margins for the ingredients are among the most attractive in Solazyme’s product portfolio, and the technology is commercial-ready."
Solazyme also had a wide-range of other partnerships, signing-on two additional partners this year alone.
Molchanov sees mostly non-cash and non-material charges with zero impact on FY13 revs guidance. He has Solazyme at Outperform and target price of $12.50.
For an analyst ratings summary and ratings history on Solazyme click here. For more ratings news on Solazyme click here.
Shares of Solazyme closed at $10.94 yesterday.
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