Inphi Corporation (IPHI) is Fully Valued - Northland Capital Markets

Gus Richard from Northland Capital Markets talked to 6 companies last week to discuss (NYSE: IPHI) and its market position in DC. IPHI is extremely confident in its position and indicated it is working with the right customers on 100G PAM4. However, the analyst is not as confident. "The issue for us is that 100G NRZ will be deployed first and the cost advantage of PAM4 is unclear" says Richard.

PAM4 modulation for optical networking will ultimately be the modulation scheme of choice. The question is when, and at what speed will it be 100G, 200G or 400G. Early deployments in the data center look to be NRZ, the legacy modulation scheme. In addition, manufacturing costs decline by a fixed percentage when cumulative unit volume increases. Given the early lead by NRZ and it has been proven to work for 100G, it will ramp first and they would expect NRZ to have a steeper price decline than PAM4.

Considering the controversy surrounding IPHI, the analyst thinks shares are fully valued here. No change to Market Perform rating or $31 PT.

For an analyst ratings summary and ratings history on Inphi Corp. click here. For more ratings news on Inphi Corp. click here.

Shares of Inphi Corp. closed at $31.83 yesterday.

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