Infinera Corp. (INFN) Looks "Substantially Undervalued" After Analyst Day - Needham & Company
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Needham & Company analyst Alex Henderson reiterated a Strong Buy rating and $15.00 price target on Infinera Corp. (NASDAQ: INFN) after attending the company's analyst day that highlighted 800G is starting a 7 to 10 year investment cycle. The analyst believes the company has one of the best products and will likely end up in a "two horse race" with Ciena in a market expected to be $3 - $4 billion.
The analyst noted that management "detailed its business model targets for the CY20-CY23 period and its longer term expectations out through CY25. The forecasts are predicated on strong dynamics for the 800G ICE-6 product, the strong position of Infinera in Open Line Systems, and the potential for the XR point to multi-point edge product. Infinera expects to deliver an acceleration to 8%-12% growth and 300-400 BPs improvement in Operating Margins annually, reaching double digits in CY23 and mid-teens by CY25. We believe Infinera is at the early stages of a major revitalization on the strength of its new products, similar to the strong run Ciena had when it owned the 400G market for 3-4 years. We think the stock is substantially undervalued."
Shares of Infinera Corp. closed at $9.06 yesterday.
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