Feltl Reiterates Buy On EzChip Following Acquisition Of Tilera


In a research note issued today, Feltl and Company analyst Jeffrey Schreiner reiterated a Strong Buy on EzChip Semiconductor Inc. (EZCH) with a price target of $34.00, following EZCH’s announcement of their acquisition of Tilera Corporation.

The analyst commented: “With regards to EZCH’s acquisition of Tilera, Schreiner wrote, “ With the acquisition of Tilera Corporation, a multi-core processor vendor, EZCH will add new growth opportunities in markets it currently does not serve. We believe in its first full year of contribution Tilera may add ~$42.5m in CY15 revenues, and ~$0.15-.20 in non-GAAP EPS accretion. Following the acquisition of Tilera, EZCH’s TAM opportunities will likely double to ~$2B in CY16”.

He continued, “We still believe stand-alone EZCH growth opportunities in CY14/15 are significant. As we stated in our June 17th note EZCH has multiple growth catalysts within its NPU business. During CY14 we anticipate a key catalyst will be the first 3-year replacement cycle for the NP-4. During CY15 we believe the last NP-3 3-year replacement cycle will potentially occur, supported by ZTE/CSCO. In addition, during CY15, we expect new product, NP-5 revenue, to become meaningful as new systems are released during 2H14. In addition to product/3yr replacement catalysts, we believe edge routing markets remain in favorable spending environment, due to the router CAPEX cycle. With the acquisition of Tilera Corporation, a multi-core processor vendor, EZCH will add new growth opportunities in markets it currently does not serve. We believe investors should be aggressively accumulating shares of EZCH”.

According to TipRanks, which measures analysts and bloggers success rate based on how their calls perform, analyst Jeffrey Schreiner currently has a one-year average return of 7.9% and a 67% success rate. Schreiner has a 4.4% average return when recommending EZCH, and is ranked #748 out of 3154 analysts.

 

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