Needham & Company Upgrades ADTRAN (ADTN) to Buy
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Needham & Company analyst Richard Valera upgraded ADTRAN (NASDAQ: ADTN) from Hold to Buy with a price target of $20.00.
The analyst commented, "ADTN delivered a solid 4Q print and issued 1Q21 guidance ~inline w/consensus, despite ongoing/worsening component supply issues, which are expected to pressure GMs over the next several Qs. That said, demand trends sounded robust, w/excellent strength seen w/US Tier 2/3 customers, progress being made on several Tier 1 wins (expected to contribute materially in C'2H21) and RDOF another potential driver in late C'21. While noting some added GM pressure/risk from supply issues, we remain confident ADTN should be able to drive revenue acceleration in C2H21 and into C'22. That said, we think ADTN's valuation of ~1.2x EV/Sales on our C'21 estimate, the lowest of its peers and half peer group avg of 2.4x, drives a favorable risk/reward. As such we upgrade to Buy with a PT of $20, or EV/Sales of 1.4x our C'22 forecast."
Shares of ADTRAN closed at $16.09 yesterday.
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