Noble Financial Cuts SeaChange (SEAC) to Hold; Sidelined Until Revenue Improvement Appears
Noble Financial oowngrades SeaChange (Nasdaq: SEAC) from Buy to Hold following Q4 results and termination of CEO Jay Samit.
Analyst Michael Kupinski offered the following commentary with SeaChange's repot:
- CEO was terminated. We believe that Jay Samit was terminated due to a failed acquisition and the company's pivot from an aggressive and expensive push into Over The Top (OTT) growth initiatives, which had limited near term revenue opportunities.
- Taps down Liberty's revenue opportunity. Management unbelievably disavows previous management guidance and revenue metric for its Nucleus roll-out with Liberty Global (LBTYA: Not Rated); nonetheless, it believes that the revenue growth opportunity is attractive.
- Revise estimates lower. We are lowering our fiscal 2017 revenue expectation, from $116 million to $110.1 million, and lowering our cash flow and earnings estimates to the low end of the company's guidance
Kupinski recommends investors remain on the sidelines and await improved revenue visibility and the prospect of enhanced revenue growth, which appears to be at the least back half fiscal 2017 weighted.
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