UPDATE: D.A. Davidson Reiterates Buy Rating, Lowers PT on RadiSys Corporation on Attractive Risk-Reward Profile

In a report published Wednesday, D.A. Davidson analyst Thomas Diffely reiterated a Buy rating on

, but lowered the price target from $4.50 to $3.50. In the report, D.A. Davidson noted, "Revenue of $48.2 million and pro-forma EPS of $0.01 missed the Street mean of $50.4 million and $0.06, respectively. Pro-forma GM of 33.3% was below our 37.3% estimate and below the low end of the guided range (36%- 39%), attributable to unfavorable product mix (higher mix of low margin ATCA products). RSYS is guiding revenue of $44-$50 million, largely meeting the Street mean of $47.7 million. The midpoint of the proforma EPS outlook of $(0.04)-$0.06 is in line with the Street mean of $0.01. Pro-forma GM is expected at 31%-33% and non-GAAP operating expenses are projected to decline to roughly $14.5 million (from $15.6 million in 4Q). Cash flow is expected to be a positive $3 million (inclusive of ~$2 million of restructuring charges)." RadiSys Corporation closed on Tuesday at $2.50.