Wedbush Downgrades Ubiquiti Networks (UBNT) to Neutral

Wedbush downgraded Ubiquiti Networks (NASDAQ: UBNT) from Outperform to Neutral with a price target of $41.00 (from $48.00).

Analyst Sanjit Singh said, "We are downgrading shares to NEUTRAL from OUTPERFORM given a significant increase in inventory levels that poses risks to estimates in FY15 should management’s growth projection’s not materialize. Despite a strong beat on revenue, a small beat on EPS, and in-line FQ3 guide, we advise investors to move to the sidelines given a 4x increase in inventory from January levels. Management indicated that the increase reflects anticipation of strong demand in 1HFY15, the launch of new products and a desire to prevent stock-out of existing solutions which has been a persistent problem in recent years. While we think it is possible that management’s forecast of strong demand may materialize, we think there is significant downside to our revenue, margin, and EPS estimates should it not, creating a more balanced risk-reward at current levels."

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

Shares of Ubiquiti Networks closed at $41.37 yesterday.

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