Cavium Networks, Inc. (NASDAQ:CAVM)

CAPS Rating: 2 out of 5

Provider of highly integrated semiconductor processors that enable intelligent networking, communications and security applications.

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Member Avatar TheBlindCat (27.53) Submitted: 9/16/2011 2:59:49 AM : Outperform Start Price: $36.92 CAVM Score: -43.08

Acquisition target. Massive amounts of consolidation occurring in tech right now.
More and more functionality is being integrated into single chip (SOC) architectures. Smaller and faster more capable chips are starting to appear everywhere from household appliances to automotive. It's not just smartphones. Next stop, kids toys.

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Member Avatar Calinvestments (96.04) Submitted: 5/13/2011 1:34:57 PM : Outperform Start Price: $45.72 CAVM Score: -50.92

This is a small/mid cap high growth stock that should outperform the S&P during the bull market.

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Member Avatar romanruler (< 20) Submitted: 5/26/2010 10:28:00 AM : Outperform Start Price: $27.02 CAVM Score: -17.18

Was a favorite of mine in the past, but competition from NETL will be limiting the upside. Still offers great Multicore processor chips that will continue to grow with the Market.

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Member Avatar ddebo44 (39.53) Submitted: 4/24/2008 10:20:09 PM : Outperform Start Price: $21.40 CAVM Score: +59.83

The technology sector continues to be hot. This company deals overseas where emerging markets and upgrading continue.

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Member Avatar TechGooRoo (23.72) Submitted: 11/2/2007 12:43:23 AM : Underperform Start Price: $28.98 CAVM Score: -16.09

Let's review some vital data:

- Market cap: $1.15B
- Revenue for the trailing 12 months is about $48M.

That's right, they're currently trading at 24x revenue. That's simply absurd. If some 800lb. hardware company wanted to buy Cavium, they'd almost certainly wait until it dropped at least to the 10x range, unless it was a very strategic acquisition and there was competition.

Even if you assume similar revenue growth for the next quarter, to $16M, that's $54M for all of 2007, and still 21x revenue.

3rd quarter was the first quarter where Cavium was profitable. They made $186K of profit from product, the rest was from interest income on the $100M they received when they went public in May. That's $1.3M in interest income.

Given the Q3 net income of $1.31M, they'd have to double their net income for the next three quarters to gain a TTM P/E 58.

While Cavium looks like a fine company, the stock price is way inflated.

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Member Avatar midas784 (< 20) Submitted: 7/26/2007 1:23:03 AM : Underperform Start Price: $27.55 CAVM Score: -22.14

Another bloated pig - market cap of $1.3 billion and less than $40mil 2006 revenues... Pig Pig Pig !!!!

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Member Avatar Kduser (80.06) Submitted: 7/19/2007 3:40:58 PM : Outperform Start Price: $26.29 CAVM Score: +34.32

They have working IP.

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Member Avatar farmerellis (< 20) Submitted: 7/12/2007 12:32:25 AM : Underperform Start Price: $26.24 CAVM Score: -32.16

Its a long way down.

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Member Avatar kanantha (< 20) Submitted: 7/8/2007 9:09:33 PM : Outperform Start Price: $23.64 CAVM Score: +51.42

Good customer base and innovative in what they are doing - all good qualities for me.

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Member Avatar valuepickerboy (< 20) Submitted: 6/23/2007 9:14:08 PM : Underperform Start Price: $24.22 CAVM Score: -44.29

this is a valuation short - so it might take a while. but the valuation on this thing is ridiculous.

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