- CEVA, Inc (NASDAQ: CEVA) shares have been trending lower in recent months, and have lost 17 percent since November 4.
- Chardan Capital’s Marc Estigarribia maintained a Buy rating for the company, with a price target of $27.
- The company is well positioned to benefit from growth in the low-end smartphone market, Estigarribia stated.
Analyst Marc Estigarribia mentioned that fabless chip designer CEVA is well positioned to benefit from growth of low-end smartphones and to capture a significant share of markets in China and India. He added that the may also benefit from improvement in the baseband and non-baseband businesses, coupled with the growing presence of its key licensees.
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Estigarribia believes that the Chinese government’s mandate for investment in semiconductor technology and bringing it “in house” also drives CEVA’s growth opportunity in licensing its IP. He wrote further, “Also, as the high-end smart phone market is going through major headwinds, CEVA's low end strategy is perfectly timed.”
Growing demand for LTE shipments of low-cost smartphones is expected to drive robust royalty growth for CEVA in 2016. The company is estimated to record FY2016 revenues of $69.3 million, up 16.5 percent y/y, with a non-GAAP EPS of $0.76.
CEVA’s focus on R&D and innovation in areas relating to Connectivity, Imaging of Vision, Sensing, LTE processing and Base Station should help the company maintain a competitive advantage, the Chardan Capital report noted.
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