UPDATE: Brean Capital Reiterates on SeaChange International on Value Being Created in Turnaround

In a report published Tuesday, Brean Capital analyst Todd Mitchell reiterated a Buy rating on SeaChange International SEAC, and raised the price target from $14.00 to $18.00. In the report, Brean Capital noted, “SeaChange has undergone a significant turnaround over the past two years which we believe is about to manifest itself in stronger fundamentals. SeaChange has maintained its leading back office position as the industry enters a major upgrade cycle to TV Everywhere, and opened up a new market in CPE software for home gateways with a key position supporting RDKs for Comcast (CMCSA, $49.12, Buy) and Liberty Global (LBTYA, $85.07, not rated), while ad insertion waits for advertising to follow eyeballs from linear to on-demand. We expect SeaChange to begin to show operating leverage in F4Q14 and our due diligence shows a growing pipeline. We look for revenues to accelerate and margins to expand in F2015 and F2016 as next-gen product growth overcomes prior-gen attrition and professional services engagements transition to higher margin licensing arrangements. Moreover, with its leading position in service provider software, we believe SeaChange could be of strategic value to a larger hardware provider in the space. As a result, we are raising our price target on shares of SEAC to $18 from $14 and we reiterate our Buy rating.” SeaChange International closed on Monday at $14.43.