Airgain Inc (NASDAQ:AIRG) investors had a rough day, seeing their shares sink nearly 23% to $10.57. The reason? The wireless antenna maker released its second-quarter report, which failed to live up to Wall Street’s expectations.
While remaining positive on the long term fundamentals, B. Riley analyst Craig Ellis lowered his price target on AIRG from $19.00 to $17.00. Ellis keeps his rating at Buy as he believes the stock is a mid-teens long-term grower. However, near-term Ellis estimate changes include lower 2H17 sales, higher GM but also higher opex.
Ellis wrote, “Sales were fractionally above RILY but below the Street by the same amount. Our sense is there were numerous positive developments in 2Q, including on-track Antenna Plus sales, initial engagement with longrange low-power IoT formats including LoRA, competitive takeaways, and DOCSIS 3.1 activity, though a US operator rollout seems to be occurring more slowly than envisaged early-year and versus the 2H estimates in RILY’s model. GM was a bright spot, at 47.0% above our projection and with mid-40’s or slightly better likely in 2H17. In our view, that shows AIRG’s strong technology position for an array of applications is well rewarded by customers who increasingly need more antennas to achieve ever-higher download and uplink speeds.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Craig Ellis has a yearly average return of 27.7% and a 73% success rate. Ellis has a 1.4% average return when recommending AIRG, and is ranked #40 out of 4628 analysts.
As of this writing, all the 4 analysts polled in the past 12 months rate Airgain Inc stock a Buy. With a return potential of 86%, the stock’s consensus target price stands at $19.67.