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Recent M&A, Backlog Strength Encouraging Signs For Silver Spring Networks

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Recent M&A, Backlog Strength Encouraging Signs For Silver Spring Networks

Oppenheimer has lifted the price target on Silver Spring Networks Inc (NYSE: SSNI) shares from $15 to $17 based on valuation supported by recent M&A and strength in backlog. This implied upside potentials of about 20 percent from the current levels. The firm has an Outperform rating on the company's stock.

Analysts Noah Kaye and Colin Rusch valued the developed business at $11 a share, up from earlier valuation of $7, and managed/SaaS unit at $6 a share, down from the previous valuation of $8 a share. They cited the following four types of buyer profiles for the company:

  • Metering vendors.
  • International integrators.
  • Industrial firms creating IoT platforms.
  • Companies engaged in Big Data.

In a research note, the brokerage said, "We believe SSNI has multiple opportunities to leverage its valuable technology platform, including optionality on the broader IoT, but will need to prioritize opportunities given resource constraints vs. larger smart metering and networking peers."

Related Link: The Street's Reaction To Oracle's Final Tender Offer Date Shows Concern With Deal

Oppenheimer sees the company recording double-digit growth in backlog in the fiscal year 2016. Similarly, the firm believes the base business has the potential to offer tail in the next five or six years, thus ensuring cash flow to support strategic planning on a long-term basis.

Although there are several possible ways to achieve long-term growth, the brokerage believes the company needs to characterize and implement the strategic priorities.

The stock traded flat at $13.97 at time of writing.

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Latest Ratings for SSNI

DateFirmActionFromTo
Sep 2017DowngradesBuyNeutral
Sep 2017MaintainsHold
Sep 2017DowngradesOutperformMarket Perform

View More Analyst Ratings for SSNI
View the Latest Analyst Ratings

Posted-In: Colin RuschAnalyst Color Long Ideas Price Target Reiteration Analyst Ratings Tech Trading Ideas

 

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