- RBC Capital notes UTStarcom's (NASDAQ:UTSI) shares have risen sharply in recent weeks amidst mixed fundamentals and they are maintaining Sector Perform rating and price target of $8. Firm believes most of the stock activity may be related to short covering. Short interest is now ~23% of the float.
Fundamentally, they estimate the quarter may be tracking between the low to mid range of the guidance of $590-$625M recognizing that the business remains very lumpy. RBC remains at consensus or $595M. And while up sequentially ~8% from the prior quarter, the core
businesses are still declining YoY.
The PAS market continues to decline and the firm is estimating a decrease of almost 30% sequentially in what is a seasonally weaker quarter for this segment. Revenues in the PCD (50%) segment may see some incremental growth and thus far the reception on UTStarcom's CDM 7000, CDM 7025 as well as the Sidekick 3 and the XV 6700 and the PPC 6700 PDAs remain favorable.
Longer-term, PAS revenues may decline by about 15% over the next several years. This decline may be offset by growth in broadband (9%) driven by IPTV and wireless (21%) driven by emerging market CDMA expansions. PCD (50%) is likely to display modest growth looking ahead and is likely to remain a large portion of overall revenues.
Notablecalls: I must say the note started out much stronger than it ended. Still, I'd keep UTSI on the radar today and on Monday as the stock may be continue rolling over.
Fundamentally, they estimate the quarter may be tracking between the low to mid range of the guidance of $590-$625M recognizing that the business remains very lumpy. RBC remains at consensus or $595M. And while up sequentially ~8% from the prior quarter, the core
businesses are still declining YoY.
The PAS market continues to decline and the firm is estimating a decrease of almost 30% sequentially in what is a seasonally weaker quarter for this segment. Revenues in the PCD (50%) segment may see some incremental growth and thus far the reception on UTStarcom's CDM 7000, CDM 7025 as well as the Sidekick 3 and the XV 6700 and the PPC 6700 PDAs remain favorable.
Longer-term, PAS revenues may decline by about 15% over the next several years. This decline may be offset by growth in broadband (9%) driven by IPTV and wireless (21%) driven by emerging market CDMA expansions. PCD (50%) is likely to display modest growth looking ahead and is likely to remain a large portion of overall revenues.
Notablecalls: I must say the note started out much stronger than it ended. Still, I'd keep UTSI on the radar today and on Monday as the stock may be continue rolling over.
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