GREY:TZWLF - Post by User
Post by
403xyz1on May 27, 2010 8:19am
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Post# 17135346
Analysts are here!! - Cannacord Target $1.80
Analysts are here!! - Cannacord Target $1.80Tranzeo has made the investments -- time to reap the rewards
Tranzeo designs and manufactures WiMAX and WiFi networking solutions primarily targeting rural wireless network operators in developed markets and wireless service providers in emerging markets attempting to bridge the digital divide. We believe that Tranzeo's largest opportunities reside in emerging markets. In Indonesia, the government has mandated that fixed WiMAX deployment occur in both the 3.3GHz and 2.3GHz bands with strict local content requirements. Tranzeo is positioned well to become a primary supplier into this market as it has set up local manufacturing capability and has partnered for its go-to-market strategy. This approach has begun to bear fruit with a US$14 million order from TRG. Finally, we believe that WiMAX infrastructure spending will accelerate in the coming few years in India and other emerging markets and that Tranzeo's end-to-end WiMAX offering positions the company well in front of this trend.
Initiating coverage with a SPECULATIVE BUY recommendation and C$1.80 target
Tranzeo has experienced a significant ramp in orders that as of April totalled US$45.5 million in backlog. For F2010, we are projecting revenue to climb to about C$41 million, on the lower end of guidance, with adjusted EPS of C
.03. For F2011, we are forecasting revenue at C$70 million and adjusted EPS at C
.13. We are initiating coverage of Tranzeo Wireless with a SPECULATIVE BUY recommendation and a C$1.80 target based on our DCF and industry comparables analyses. Our target price implies a F2011E P/E multiple of 14x.