Canaccord Genuity analyst T. Michael Walkley came out with a report on Sierra Wireless, Inc. (USA) (NASDAQ:SWIR), after hosting investor meetings with the company’s management in Chicago. The analyst maintained a Buy rating on the stock and reduced the price target from $50 to $44.
The analyst maintained his belief that Sierra Wireless is well positioned to benefit from strong long-term IoT industry growth trends in its industry-leading OEM solutions business. In addition, following the recent Maingate and Accel Networks acquisitions, the analyst anticipates continued growth for Sierra Wireless’s higher margin enterprise solutions division and anticipates the company will remain acquisitive to drive higher-margin sales growth focused in areas that bolster its enterprise solutions business.
However, the analyst anticipates increased near-term investments in R&D to launch a new line of enterprise gateway products with increased investments in its sales force to broaden its sales reach will impact near-term operating margin leverage, leading him to slightly lower his estimates.
Walkley wrote, “We believe Sierra Wireless’s OEM solutions product line is well positioned to benefit from strong secular growth trends in the Industrial IoT or M2M markets. In fact, we believe Sierra’s broad 2G, 3G and 4G LTE-based module portfolio with built-in computing intelligence and pre-integrated cloud connection capabilities through its AirVantage cloud platform should enable Sierra Wireless to maintain and grow its industry-leading market share in embedded wireless modules that ABI estimates at 34% during 2014.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst T. Michael Walkley has a total average return of 24.5% and a 71.6% success rate. Walkley has a 38.8% average return when recommending SWIR, and is ranked #3 out of 3612 analysts.