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5 Reasons Finisar Is An Analyst's Top Pick For 2018

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5 Reasons Finisar Is An Analyst's Top Pick For 2018

2017 was a challenging year for Finisar Corporation (NASDAQ: FNSR), with the stock losing more than 30 percent. But some on Wall Street are optimistic the coming year will be a profitable one for shareholders of the optical communications company. 

The Analyst

Northland Capital Markets' Tim Savageaux maintains an Outperform rating on Finisar's stock with an unchanged $33 price target. The analyst named Finisar as its top pick in the Comm Tech sector for 2018.

The Thesis

The case for owning Finisar's stock in 2018 is five-fold, Savageaux said in a research report. (See the analyst's track record here.) They are, according to Northland Capital Markets:

  • A major opportunity ahead in the 3-D sensing space, which could contribute an incremental $10 to $15 per share.
  • Continued 100G Cloud datacom growth.
  • New product ramps in 100G/Metro Telecom.
  • The potential for sector consolidation.
  • A recovery in China after serving as a "main source of pressure" throughout 2017.

Given the multiple catalysts ahead, Finisar's stock could be seen as attractive after a notable pullback from the $20 level, Savageaux said. Finisar's quarterly revenue capacity of $30 million is expected to ramp to over $100 million by the end of next year and is accompanied by "attractive" margins, he said. 

"We believe FNSR is well-positioned to manage pricing, volume and cost dynamics given its industry-leading scale and manufacturing capacity." 

Price Action

Shares of Finisar were trading lower by around 0.6 percent midday Friday. 

Related Links:

Optical Stocks In Focus Following Apple's Deal With Finisar

8 Semiconductor Stocks That Could Be Acquisition Targets

Latest Ratings for FNSR

DateFirmActionFromTo
Sep 2019MKM PartnersMaintainsNeutral
Dec 2018JefferiesDowngradesBuyHold
Dec 2018MKM PartnersDowngradesBuyNeutral

View More Analyst Ratings for FNSR
View the Latest Analyst Ratings

 

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Posted-In: 3D sensing Northland Capital markets Technology Stocks Tim SavageauxAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

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