Roth Capital Reiterates Buy On Pixelworks On Positive Long-Term Outlook; Raises PT To $12


In a research note released today, Roth Capital analyst Krishna Shankar reiterated coverage on shares of Pixelworks (PXLW) with a Buy rating and a $12 price target. The note follows PXLW’s second quarter results with revenues/pro-forma EPS of $15.2 million/$(0.06) versus Shankar’s $15.0 million/$(0.03) estimates and guided to strong 12% sequential revenue growth.

Shankar commented: “PXLW had solid 2Q14 results and guidance driven by ramp of new projector platform and demand for high-resolution/4K Ultra-high definition TV/monitor video processors. We are positive on continued IP licensing/royalty revenues and Iris mobile video processor revenues (chip sampling now) from the high-volume smartphone, tablet and premium notebook PC market. PXLW estimates may have upside if the mobile video processor chips or IP are adopted in some high-end smartphone/tablets”.

The analyst added, “We raise our target price from $10 to $12 is based on 30x CY15 proforma EPS estimate of $0.44 and discounting back 10%, using a PEG ratio of 1x relative to 30% secular earnings growth”.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform analyst Krishna Shankar has an 18.1% average return and a 62.5% success rate. Shankar has a -12.5% average return when recommending PXLW, and is ranked #257 out of 3195 analysts.

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