EZchip upgraded to Outperform at Oppenheimer; tgt $31
9:29 AM ET
. Oppenheimer upgrades EZCH to Outperform from Perform and sets target price at $31, based on much-improved risk-reward, following a 21% sell-off Wednesday. They believe the sell-off is overdone and exaggerates the impact of mgmt's reduced long-term revenue target. Despite lower guidance, EZCH still offers attractive investment potential for 1) expanding edge router market and rising customer traction; 2) high margin/leverage operating model; and 3) $6 cash per share. They note their current FY16 revenue targets and annual top-line growth are significantly lower than the company's long-term target ('12-'16 rev. CAGR of 19% vs 32%).