SGI Transitions In 4Q, 2011 Looks Promising
September 01, 2010 7:38 AM
Silicon Graphics International Corporation (NASDAQ: SGI) reported a 4Q loss of $0.55/share on revenues of $122.2M, below Morgan Keegan's estimate of $0.19 on $128.9M.
Morgan Keegan believes that SGI made steady strides in FY2010, as the company underwent a significant merger, produced a new product line, and entered multiple new accounts, setting itself up for revenue growth for FY2011.
Shares are believed to be undervalued given the solid balance sheet and revenue from recurring services by Morgan Keegan, which reports that resuming the share buyback (worth $40M) reflects the management's confidence in business trends entering 2011.
Morgan Keegan reiterates its Outperform rating and $12.50 price target.
Silicon Graphics International Corporation closed yesterday at $5.92.
