UPDATE: Credit Suisse Downgrades Entropic Communications to Underperform on Competitive Pressures
Credit Suisse reduced its rating on Entropic Communications (NASDAQ: ENTR) from Neutral to Underperform and lowered its price target from $6.50 to $5.
Credit Suisse commented, "We expect a soft macro environment to drive sub-seasonal ENTR revenue growth from Core products (77.1% of revs), and for SoC growth to be dilutive to GM for the foreseeable future (SoC low 30s GM vs. Core mid-50s GM). From a development perspective, we believe ENTR is at least 18mo. from an integrated STB+MoCA product, potentially requiring higher NT R&D expenses as ENTR pushes development to catch up with BRCM, who is delivering integrated MoCA 2.0 across multiple 40nm STB IC's today. In the interim, we see the potential for share loss as BRCM capitalizes on integration and technology advantages, adding further risk to earnings."
Entropic Communications closed at $5.61 on Monday.
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