This connectivity company beat estimates by a penny last quarter, posting EPS of $0.06 per share. Analysts have increased the company’s earnings estimates four times in the past 30 days.
CEVA (CEVA)
from Canaccord Genuity Research
We’ve increased our price target on CEVA (CEVA) to $26.00 from $25.00 and as the company reported strong Q2 results and provided Q3 guidance well above our and consensus estimates as broad IP licensing strength remained and LTE royalties from Samsung and other LTE customers inflects higher.
Following a sustained period of competitive headwinds for CEVA’s cellular baseband DSP licensees, we now anticipate market share shifts toward CEVA licensees in both the 4G/LTE and 3G higher-royalty baseband markets. We anticipate these share shifts will drive a resumption of strong baseband royalty growth for CEVA over the next several years, beginning 2H/15 as shown in the Q3 guidance.
In addition, following the acquisition of Bluetooth/Wi-Fi IP provider RivieraWaves, we believe several emerging consumer and IoT markets provide CEVA with new, large royalty TAM opportunities over the next five years.
Q3/15 guidance inflects higher as expected with higher-royalty LTE share gains. We reiterate our BUY rating and increase our price target to $26.
Matthew D. Ramsay and Steven Lee, Canaccord Genuity Research, www.canaccordgenuity.com, 617-371-3711, 2014July 31, 2015