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EPS100Momentum (71.71)

ISSI fell about -40% during Market Meltdown last week and is still down about -35%

Recs

3

May 10, 2010 – Comments (2) | RELATED TICKERS: ISSI

from its highs achieved after it issued guidance raising both current qtr and next qtr eps est. up by nearly 100% higher.

.44 eps and .43 eps respectively and thats not chump change because its for a stock trading at an incredible value of only $10.55/shr currently which is lower than it was even trading before the higher guidance was given.

2 Comments – Post Your Own

#1) On May 10, 2010 at 2:36 PM, EPS100Momentum (71.71) wrote:

Neeham raised ISSI to $16.0

Needham & Co., LLC Research Y. Edwin Mok (415) 262-4896

emok@needhamco.com

Please click here for the full report with disclaimers

ISSI 2Q10: Another Beat and Raise; Reiterate Buy and Raise PT to $16 We reiterate our Buy on ISSI after the company reported another strong quarter and provided higher guidance. While a positive pricing environment clearly is benefiting ISSI, the company is seeing strong demand coming from Networking/Telecom and the Automotive industries.

We believe the latest report reaffirms ISSI's strategy to focus on specialty memory markets, which enables ISSI to expand its margin profile and deliver consistent growth. We see more upside to estimates and therefore recommend investors buy the stock despite trading at 52-week high.

• F1Q10 (Dec) results beat updated guidance. Revenue of $57.0MM surpassed the already raised guidance range of $54-56MM. GM of 37.2% was at the high-end of guidance of 34-38%, partially due to a 1.1% benefit from sales of previously reserved inventory. GAAP EPS of $0.27 also beat the updated guidance range of $0.20-$0.24.

• Strong demand is driving higher JunQ guidance and likely further growth in SepQ. F3Q10 (Jun) guidance of $64-70MM/$0.44-$0.50 implies revenue and EPS will surpass prior peak levels at the mid-pts. Furthermore, with a strong backlog, ISSI sounded more confident that the demand strength will extend into SepQ.

• Improved product mix and its focus on specialty market enables ISSI to maintain GM in the mid-30%s. Product mix is improving for ISSI, and the company is winning more designs for high-density memory products. Additionally, we believe ISSI's strategy to focus on specialty market, such as Auto (21% of MarQ sales) and networking/telecom, allows the company to generate better margins.

• Spin-off could lower revenue in SepQ and beyond, but little impact on EPS. ISSI is expected to own less than 50% of its subsidiary Giantec by the SepQ, which will reduce total revenue by ~10%. However, spinning-off of Giantec will boost GM and has a neutral impact to EPS.

• Raise estimates and PT. We raise our FY10 non-GSSP EPS estimate to $1.36 and FY11 to $1.57. Our price target has increased from $10 to $16, or just 10X P/E off our CY11 non-GAAP EPS of $1.65.

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#2) On May 10, 2010 at 5:58 PM, rbv21 (< 20) wrote:

I hope so, I bought this in 2000 for around $13/share. I have been sitting on it for 10 years. Not a very good investment on my part!

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