Piper Jaffray Cuts Price Target on Finisar (FNSR) Following 1Q EPS Beat
Piper Jaffray reiterated an Overweight rating on Finisar (NASDAQ: FNSR), and cut the price target to $20.00 (from $26.00), following the company's 1Q16 earnings results. FNSR reported revenue of $314.0M, below consensus estimates of $318.7M. Non-GAAP EPS of $0.23 was $0.03 below Street expectations.
Analyst Troy Jensen commented, "Finisar reported weaker than anticipated July quarter results, and the FQ2 revenue guide was approximately $14 million below consensus. 40G demand remained strong, but the lackluster sequential growth was driven from higher than expected pricing erosion for 10G transceivers. The poor guidance is primarily due to lower than anticipated 40/100G transceiver orders from Web 2.0 customers, which is largely a result of orders being pushed out and ongoing pricing erosion for 10G. Despite the slightly weaker than expected guide, we remain positive given our expectations for improved revenue growth throughout 2016. We believe this will be driven by continued Datacom growth from both Enterprise and Web 2.0 coupled with improvement in FNSR’s Telco offerings as we progress into the Metro Cycle in 2016. As such, we are reiterating our Overweight rating, but lowering our price target to $20 (from $26)."
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Shares of Finisar closed at $14.91 yesterday.