XG Technology: We Recommend Investors Remain On Sidelines, Says Feltl And Company
In a research note published today, Feltl and Company analyst Jeffrey Schreiner reiterated a Hold rating on XG Technology Inc (XGTI) with a $1.50 price target, following the news that XGTI was awarded a subcontractor position to provide cognitive radio solutions within the broader CERDEC (U.S. Army Communications-Electronics Research, Development and Engineering Center) IDIQ (Indefinite Delivery, Indefinite Quantity).
Schreiner wrote, “Following the second announced CERDEC subcontractor win shares of XGTI have traded higher by ~10%. We don’t believe the potential dollar value of the CERDEC contract is material to near-term XGTI revenues. In addition to the estimated limited contribution regarding CERDEC contract, we believe risks still remain relating to XGTI’s CY14 guidance (~$18-20m). Given lack of new contracts in key end markets (rural telco/public safety) we see potential for downside risk to our future year estimates. Execution risk remains a concern as the company has recognized minimal revenues from its prior backlog. We recommend investors remain on sidelines until execution concerns are addressed”.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform analyst Jeffrey Schreiner has a 3.2% average return and a 56.1% success rate. Schreiner has a 4.2% average return when recommending XGTI, and is ranked #1189 out of 3003 analysts.