Here's MDB's perspective from February 15, 2008.
Increasing Price Target to $10.00 As Ramtron Posts Another Solid Quarter
SUMMARY
Yesterday, Ramtron International Corporation continued to impress us with very solid fourth quarter and full-year, FY2007, results. The company posted a robust top line of $14.3 million, up 7% from $13.4 million in the prior quarter, and up 51% from $9.5 million during same quarter a year ago. We were looking for $12.9 million. Product gross margins were a tad lower than we expected, coming in at 52.8%. But total expenses of $13.1 million remained under control, increasing only 8% or $1.0 sequentially. On the bottom line, and as a result of a non-cash income tax benefit of $7.6 million due to planned utilization of its NOLs, Ramtron posted GAAP EPS of $0.34,
which was much higher than our $0.03 estimate. But, excluding this income tax benefit and stock based compensation of $615,000, the non-GAAP EPS was $0.06. For the full year, FY2007, the company posted total revenue of $51.1 million, up 26% from $40.5 million the previous year; and, the non-GAAP EPS of $0.18 compared to $0.06 in FY2006. We were looking for a non-GAAP EPS of $0.16 for the quarter.
Clearly, Ramtron had a stellar FY2007; and, we believe the outlook for the company in FY2008 remains very positive. During FY2007, the company successfully introduced 17 new products--up from 6 in FY2006, and exceeding its goal of 13 for the year. More products are planned for the year ahead. Meanwhile, the company’s projections for revenue growth have firmed to between 24%-28% in FY2008. The company is executing against its operating model consistently, allowing us to increase the multiple of our FY2009 non-GAAP EPS from 20X to 24X, resulting in a new target price for these shares of $10.00.
Our rating on Ramtron shares remains BUY. |
