We Remain Constructive On Shares Of ADEP Over A Longer Time Horizon, Says Roth Capital

In a research report published today, Roth Capital analyst Matt Koranda maintained a Buy rating on Adept Technology (NASDAQ:ADEP) with a $13 price target, following the company’s fiscal fourth quarter results. 

Koranda wrote, “ADEP missed FQ4’14 expectations on weaker-than-expected performance in the North American market. There could be near-term weakness in shares as management addresses issues in this key geography (~23% of FY’14 revenues). We were encouraged, however, by some strong data points, including new mobile customers, healthy growth in Europe, and attractive LT revenue and operating margin targets. As a result, we remain constructive on shares of ADEP over a longer time horizon.”

The analyst added, “While management does not typically provide guidance, ADEP unveiled long-term financial targets that we view as attractive. Within 4-6 years, management believes ADEP could generate $200mn in revenues at 45-50% GMs. Using a mid-point of five years, this implies a revenue CAGR of ~28% vs. ADEP’s historical 5-year revenue CAGR of ~7%. ADEP is also targeting 15-20% operating margins, implying operating leverage ahead.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matt Koranda has a total average return of 5.1% and a 75.0% success rate. Koranda is ranked #2108 out of 3264 analysts.

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