Predicting Tech Earnings Winners and Losers: SanDisk, Cypress, and More (SNDK, CY, SWKS, ANAD, AVGO, RFMD, TQNT, FLEX, PMCS, ALTR, XLNX, LSCC, CLS)
Earnings season is getting underway in the tech sector. What should investors expect from these reports? What are the key storylines to follow and are these stocks likely to trade higher or lower in the wake of their results?
In NextInning.com’s earnings previews, available free to trial subscribers, key storylines are evaluated, analyst expectations are audited, and in depth valuation analyses are provided to develop fair value ranges for dozens of stocks. Next Inning’s model portfolio has returned 304% since 2002, nearly seven times the return of the S&P 500.
Some of the stocks covered and questions answered include:
SanDisk (SNDK) – “Next Inning readers were alerted in 2008 to an upswing opportunity for SanDisk when it was trading at only $7.70, and were later advised to sell at $48. Next Inning moved to a cautiously speculative opinion on May 30.” Should investors continue to be optimistic about SanDisk heading into the company’s earnings report?
Cypress Semiconductor (CY) – “In short, everything is going pretty well for Cypress right now, and even its ‘incubator’ business that it terms simply as ‘emerging technology’ is showing sharp revenue growth. While this growth is from a very small base, it is still very encouraging.” Will he good news for Cypress carry over into its earnings report?
Skyworks Solutions (SWKS) – “Skyworks and other leading RF suppliers like Anadigics (ANAD), Avago Technologies (AVGO), RF Micro Devices (RFMD), and Triquint Semiconductor (TQNT) provide critical functionality needed in cellular handsets, and the dollars of RF content per handset continues to increase. In addition, RF technology is needed in applications like support of fixed and mobile broadband in areas such as India.” Is Skyowrks best positioned to ride the mobile computing wave?
Flextronics International (FLEX) – “There have been several factors that have weighed on the price of Flextronics for much of the last two years, leaving it to underperform even the dismal results of Electronic Manufacturing Services (EMS) sector as a whole. The first issue is its leveraged balance sheet, which is always viewed as a risk factor when there are questions about the durability of forward macroeconomic activity. Second, Flextronics has not been successful in boosting its non-GAAP operating profit margin to its targeted 4% level. And third, Flextronics reported below expectations for calendar Q1, and guided below expectations for calendar Q2.” Despite the challenges, why might Flextronics be poised to trade above $10?
PMC-Sierra (PMCS) – “Much of PMC-Sierra’s problem in Q1 was the inventory digestion that plagued most semiconductor companies selling into networking applications. However, while the sector isn’t exactly what I would call robust at this juncture, I think the digestion cycle is over and we’ll hear a report from PMC-Sierra that it is now shipping to production demand levels.” Is PMC-Sierra positioned for potential upside of 50% in the near- to medium-term?
In its earnings previews for the week of July 18th, NextInning.com looks at several popular tech stocks set to report earnings, including SanDisk, Cypress, SkyWorks, Flextronics, PMC-Sierra, Altera (ALTR), Xilinx (XLNX), Lattice Semiconductor (LSCC), Celestica (CLS) and more.
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