Sigma Designs (SIGM) ,Price Target Reduce To $11

Sigma Designs’ (NASDAQ: SIGM) outlook and results depicts a near term volatility as it integrates its CopperGate acquisition amid a slowdown in IPTV deployments worldwide and increasing competition from Broadcom Corporation (NASDAQ: BRCM). Analysts Uche Orji and Parag Agarwal at UBS Investment Research maintain a neutral strategy and reduces price target to $11.

SIGM’s near term results are likely to be hampered by a challenging outlook for the IPTV market. The timing and magnitude of recovery remains uncertain.
AT&T (NYSE: T) deployments are reaching a steady state, and analysts don’t find any reason for acceleration in worldwide deployments.

SIGM is likely to face increased competition from Broadcom (BRCM), who soon start shipping for Microsoft (NASDAQ: MSFT) Media room set-top boxes.

Copper Gate acquisition expanded SIGM’s reach into home networking; but needs to get more visibility, a broader consumer and carrier acceptance for mass adoption of the technology.

SIGM guided to revenue of over $10m in F4Q whereas CopperGate was running at $17m/quarter run rate pre-acquisition. The stock is currently trading at $10.48