Needham & Company Upgrades Electro Scientific Industries (ESIO) to Buy

Needham & Company upgraded Electro Scientific Industries (NASDAQ: ESIO) from Hold to Buy with a price target of $8.00 on strong orders, surprise Q3 profit and solid guidance.

Analyst James Ricchiuti commented, "We upgrade our rating on ESIO to Buy from Hold given our increased confidence that the company’s multi-year turnaround is gaining momentum, even in the face of a challenging global economy. FQ3 revenues, while slightly below our estimate, generated much stronger than expected margins, resulting in ESIO turning in its first profitable quarter in over two years. Moreover, bookings for what is normally a seasonally weaker quarter increased 30% y/o/y to the highest level in over two years. Guidance for FQ4 was better than expected, with management expecting another profitable quarter. With improving demand in the company’s core flex circuit business and encouraging market acceptance of several new products, we believe ESIO can grow its revenues in the mid-teens over the next 1-2 years, with improving profitability."

For an analyst ratings summary and ratings history on Electro Scientific Industries click here. For more ratings news on Electro Scientific Industries click here.

Shares of Electro Scientific Industries closed at $5.96 yesterday.

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