Still Potential Upside For SeaChange International

  • The share price of SeaChange International SEAC has declined more than 23 percent in the last six months, from this year’s high of $8.35 to $5.84 at market close on September 2.
  • Brean Capital’s Todd Mitchell has reiterated a Buy rating and price target of $11 on SeaChange International.
  • Mitchell believes that there is meaningful upside potential for the stock, with the negative impact of the decline in legacy products starting to wane and due to new product launched.

The company’s F2Q16 results were reflective of positive trends in its next-gen product revenues. Although total revenues declined in-line with the expectations, there was a positive mix shift due to a 51 percent rise in next-gen product revenues. This in turn led to gross margin of 53 percent, beating the estimates. Total operating expense also declined during the quarter.

The management maintained its FY2016 guidance, while issuing the F3Q16 outlook. Mitchell expects the F3Q16 results to be “driven by trends similar to F2Q16 with overall product revenues growing sequentially and the mix on product revenues continuing to shift to nextgen product revenues, while service revenues continue to trend flat on a sequential basis.”

According to the Brean Capital report, the FY2016 guidance implies a conservative stance on LGI’s launch of the SeaChange Nucleus-based video CPE, as well as the potential for winning new customers. “[T]he introduction of new SaaS products could point to upside in 2H16, or at least stronger momentum going into F2017,” the report stated.

Mitchell also believes that SeaChange is well positioned for the TV Everywhere transition and the new B2C OTT distribution models. “Together, we continue to believe that these factors make the company a highly strategic asset to a potential acquirer,” Mitchell added.

Posted In: Brean Capital LLCAnalyst ColorReiterationAnalyst Ratings

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.