Needham & Company Upgrades Aviat Networks (AVNW) to Buy
Needham & Company upgraded Aviat Networks (NASDAQ: AVNW) from Hold to Buy with a price target of $2.20.
Analyst Richard Valera states, "Aviat's 4QF14 results showed continued progress on top line, bookings and cash usage, but weaker than expected GM. While the lower GM was disappointing, we believe AVNW has a credible path to improving GM in the near term. Given the expected GM improvements, with top line momentum clearly improving, a cash position that appears to have stabilized and an EV/Sales level that is well below its nearest peers at ~0.15x, we believe the shares will be able to work higher from current levels if the company can demonstrate consistent progress during F2015, as we believe it can. As such, we upgrade the shares to Buy from Hold, and establish a PT of $2.20, or 0.26x EV/F15 Sales."
For F15, the firm reduces estimates to $366MM/ $(0.17) from $373MM/$(0.05). They introduce F16 estimates of $389MM and $0.09
Shares of Aviat Networks closed at $1.56 yesterday.