UPDATE: Canaccord Genuity Initiates Silver Spring Networks with Hold on Balanced Share Risk/Reward

In a report published Tuesday, Canaccord Genuity analyst John Quealy initiated coverage on Silver Spring Networks SSNI with a Hold rating and $18.00 price target. In the report, Quealy noted, “While we are impressed with the company's ability to innovate and sell technology and service solutions to utilities, we find share risk/reward balanced at current levels for this new public registrant. The company's $745M backlog (reported annually) helps to support P&L visibility (and a path to non-GAAP profitability) into '14 as ComEd is expected to ramp, while chatter surrounding major smart grid projects (TEPCO) and management's ability to drive SaaS business are the two most likely drivers of stock performance in the near term, in our view. Silver Spring's market share is meaningful (~30%) for domestic smart metering networks, making the company's move to upsell related applications, analytics and services a logical and seemingly leverageable strategy (management expects gross margins to reach ~43% long term).” Silver Spring Networks closed on Monday at $18.10.