I do not know how infiniband vs omnipath will work out but here are recent price targets and two analyst opinions.
I do know MLNX will have 200G and 400G out while intel is still on 100G.
New presentation out below after the call . It appears from the one slide that they might be adding the NPS to the infiniband switch IB which would add programmabilty and the ability to offload many more networking functions from the cpu.
The high speed network adapter market where they have a 90% share currently is estimated to go up 8 fold by 2018 and the spectrum switch which will definitely get the NPS is targeting the 8 billion high speed switching market. From the call the spectrum has more than 10 design wins including at least one hyperscaler and at a tech conference they felt they would get over 10% of the market. The stock is tough to own the way the market reacts to fairly good quarters when it already has a low PE. Hopefully better times are ahead as they diversify into ethernet.
files.shareholder.com
Recent broker ratings and price targets since earnings
Barclays $61 target
Credit Suisse $60 target
Piper Jaffray. 64 target
Brean Capital. 60 target
Summit Redstone Partners. 65 price target
Jeffries $50 target
Zachs $61
Credit Suisse report
Investment Thesis & Valuation
We maintain our CY16 Rev/EPS of $870.9m/$3.60, versus Street at $871.8m/$3.56, and
maintain our CY17 Rev of $1,015.1m, while modestly lowering our EPS to $4.40 from
$4.60 on lower GM (Spectrum) and higher OpEx, versus Street at $1,002.8m/$4.14,
respectively – note CY17 EPS is still growing ~22% y/y above Rev up ~17% y/y. We
reiterate our OP rating is based upon: (1) strong leverage to our Data Growth Paradigm,
(2) Core Interconnect IP supporting LT Rev CAGR of 15-20%, (3) new growth
opportunities in Spectrum (organic) and EZCH (inorganic), (4) Over-inflated concerns on
INTC as OPA likely to address less than ~15% of MLNX TAM initially, is proprietary, and
continues to have mixed performance, and (5) Compelling valuation – MLNX is trading at
~17x CY17 EPS w/SBC vs. peers at 20x. MLNX now addresses a TAM of~$11.8bn in
2016 (~$15.9bn by 2018 including EZCH) up from ~$5.8bn just 2 years ago. The
Company has benefited and should continue to benefit from improvements in memory bus
I/Os at the processor level, and SSD system level architecture. We maintain our TP of
$60, representing 20x our CY17 EPS including SBC.
MLNX more openly discussed pricing pressure from INTC’s OmniPath, but
once again downplayed competitive concerns regarding OPA stating that
INTC now has ~8 deployments of the top 500 super computers – our checks
continue to indicate that INTC’s effectiveness has been limited and
aggressive pricing has only impacted a small portion of the market that is not
performance sensitive – but it is a dynamic that we need to continue to
monitor.
Summit Redstone
Nvidia (NVDA) supplier Mellanox Technologies (MLNX) will lock up the high-performance computing (HPC) market before Omnipath from No. 1 chipmaker Intel (INTC) becomes a real threat, Summit Redstone analyst Srini Nandury said Tuesday.
Omnipath and Mellanox's Infiniband can both move data at 100 gigabits per second, but Mellanox plans to launch its 200 Gbps and 400 Gbps products in Q1, at least a year ahead of Intel's next Omnipath iteration, Nandury says. The products are used in data centers.
Intel launches new Omnipath versions in conjunction with its central processing unit (CPU) releases, so it will continually lag Mellanox, Nandury wrote in a research report. Intel's "threat (is) overblown," he says.
"Given Mellanox's impending first-mover advantage, we expect the company to lock up a majority of the HPC upgrades," he wrote. "Intel faces an uphill battle keeping up with the relentless pace of innovation driven by Mellanox, given that Intel's upgrade cycle is driven by the processor roadmap."
Nandury rates Mellanox stock a buy, with a 65 price target. |
