According to Briefing.com, ESST itself and my own research ESST is a leader in this field that is already the next big thing for the company. Look at the numbers you will see ESST is the leader in DVD and VCD chips. Some believe that ESST has been losing market share to ZRAN. It does not appear to be likely with the guidance updates from ESST. Even if it is true that ESST is losing some of the market does it really matter when ESST continues to up its guidance? My technical analysis suggest that ESST should begin moving strongly higher towards the end of next week if market conditions unfold as I expect they will. Please refer to the following:
From Briefing.com: 11:34AM ESS Technology (ESST) 21.54 +0.54: ESS Technology, a leading supplier of mixed-signal semiconductor solutions for multimedia applications, checked in with some good news this morning when it raised its sales and EPS guidance for Q1. Specifically, the company said it expects revenues to exceed $75 mln (consensus $69.53 mln) and net income per diluted share to be greater than $0.27 (consensus $0.23). This revision marks the second time in as many months that ESST has increased its guidance. In February, the company forecasted Q1 revenues of $68-70 mln and EPS of $0.22-0.25. The latest revision-- like the first revision-- was attributed to a very strong market for DVD and VCD players and an increase in ESST's market share in the DVD market. Today's news, however, isn't a total surprise. On Monday night, the company's CEO told Dow Jones Newswires that ESST had plans to raise its EPS target. What may come as a surprise, though, is that ESST's stock isn't prohibitively expensive. In fact, it is a value alternative in its fast-growing niche. Briefing.com said as much in a recent Story Stock we wrote on competitor Zoran Corp. (ZRAN). At current levels, ESST trades at 21.1x est. FY02 earnings, yet its valuation looks all the more appealing knowing that the consensus FY02 estimate is bound to be increased following ESST's revised guidance. Moreover, ESST has no long-term debt and close to $3.00 per share in cash and short-term investments on its balance sheet. Speculation that ESST was losing market share to ZRAN, which trades at 51.3x est. FY02 earnings, has acted as a restraining influence from a valuation standpoint, as has the insider selling by Chairman Fred Chan and his family. In light of today's announcement, though, it appears further multiple expansion is warranted as it is clear ESST is making the most of its position in one of the few sweet spots in the technology market and that it is holding its own in the face of competition from the likes of ZRAN. As an aside, ESST also said today it will be providing increased guidance for Q2 when it reports its Q1 results on April 24. Last month, ESST projected Q2 revenues in the range of $66-70 mln and EPS in the range of $0.18-0.22.-- Patrick J. O'Hare, Briefing.com
Also this latest press release from ESST:
ESS Technology raises guidance, cites strong demand
FREMONT, Calif., March 27 (Reuters) - DVD chipmaker ESS Technology Inc. (NasdaqNM:ESST - news) on Wednesday raised its first- and second-quarter financial forecasts for the second time in a month, citing strong demand for digital video and video CD players.
The Fremont, California-based company -- which last boosted its outlook on Feb. 28 -- said it now expects to report a profit of more than 27 cents per share in the first quarter.
That compares with a previous per share forecast of 22 cents to 25 cents for the period. ESS Technology raised its first-quarter revenue projection to more than $75 million, up from its earlier forecast of $68 million to $70 million.
Second-quarter results are ``looking stronger than previously expected'' ESS Technology said, adding that it will release a new forecast for the period when it reports first-quarter results on April 24.
``We attribute this growth in revenue to a very strong market for DVD and VCD players and to an increase in our market share in the DVD market,'' Robert Blair, president and chief executive of ESS Technology, said in a statement. ``We believe the market for DVD players is larger and growing faster than previously estimated and that our market share is continuing to grow.''
Finally take a minute and compare the financial numbers between ZRAN and ESST and I think you will see ESST is actually profitable where ZRAN is not.
Financials
biz.yahoo.com
biz.yahoo.com
ESST Six month chart from StockCharts.com:
stockcharts.com[h,a]daclyyay[pb50,200!d20,2][vc60][iUb14!Uk14!La12,26,9]&pref=G
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