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Needham & Company Downgrades Majesco Entertainment (COOL) to Hold; Console Transition Cuts Prospects

September 11, 2012 7:39 AM EDT
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Price: $9.95 --0%

Rating Summary:
    1 Buy, 2 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 6 | Down: 13 | New: 58
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Needham & Company downgraded Majesco Entertainment (NASDAQ: COOL) from Buy to Hold.

Analyst, Sean McGowan, said, "COOL reported 3Q results that failed to meet expectations. 3Q sales were down 53% YoY to $9.2mm versus our estimate of $13.3mm and consensus expectations of $12.4mm. Management cited industry-wide weakness in software sales, as well as gaming platforms that were nearing the end of their life cycle (Wii, Xbox 360, PS3) as the drivers of poor performance. GM compressed 230 bps YoY to 38.4% of sales, but exceeded our estimate...We expect 2013 growth prospects to be adversely affected by the console transition."

FY12 EPS estimate lowered from $0.25 to $0.20 and FY13 from $0.35 to $0.25.

For an analyst ratings summary and ratings history on Majesco Entertainment click here. For more ratings news on Majesco Entertainment click here.

Shares of Majesco Entertainment closed at $1.74 yesterday.


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