Needham & Company maintained a Buy rating on Digimarc Corporation (NASDAQ: DMRC), and cut the price target to $40.00 (from $46.00), following the company's 3Q earnings report. Revenues were reported at $5.6M, in-line with consensus estimates. DMRC said it received new bookings in Q3 totaling $0.9M, up from $0.1M a year ago.

Analyst James Ricchiuti commented, "DMRC after the close yesterday reported a slightly smaller Q3 loss despite modest revenue growth of 4%. At this early stage of commercial adoption of the Digimarc Barcode and Discover platform, we would not be overly focused on quarterly results but rather on the long-term opportunity of its disruptive barcode technology. DMRC has done much of the heavy lifting to build the ecosystem for the Digimarc Barcode to drive deployment by early adopters over the next 1-2 years, which we believe will ultimately result in a major inflection point for the technology. With a stronger balance sheet, DMRC is now expected to scale up investment in sales and marketing and R&D to accelerate market adoption. We believe this is the correct strategy and reaffirm our Buy rating."

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Shares of Digimarc closed at $29.75 yesterday.