Analyst Explains Why They Intevac Downgrade Their Intevac Rating

In a report released today, Nehal Chokshi from Maxim Group downgraded Intevac (NASDAQ: IVAC) to Hold, with a price target of $6.50. The company’s shares closed yesterday at $6.55, close to its 52-week low of $5.95.

Chokshi wrote:

“Results in-line but CY18 guidance cut by 20% for Thin Film Equipment & Photonics. While oDLC 2.0 difference from oDLC 1.0 is significant, we are concerned pace with which major customer is moving is indicative that the potential will never come to fruition. Validation from a top 3 smartphone OEM, we believe Huawei (private), indicates significant value from oDLC is attainable, hence we utilize a 1x EV/ S multiple for our 12-month price target of $6.50, lowered from $12.”

According to TipRanks.com, Chokshi is a 5-star analyst with an average return of 15.3% and a 60.8% success rate. Chokshi covers the Consumer Goods sector, focusing on stocks such as Hewlett Packard Enterprise, Palo Alto Networks, and Pure Storage Inc.

Intevac has an analyst consensus of Moderate Buy, with a price target consensus of $8.75.

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Based on Intevac’s latest earnings report for the quarter ending March 31, the company posted quarterly revenue of $17.97 million and GAAP net loss of $5.14 million. In comparison, last year the company earned revenue of $30.39 million and had a net profit of $1.83 million.

Based on the recent corporate insider activity of 32 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of IVAC in relation to earlier this year.

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Intevac, Inc. engages in the design, manufacture, and marketing of thin-film processing systems; and digital sensors, cameras, and systems. It operates its business through the Thin-film Equipment and Photonics segments.