A Tale of 3 Tech Stocks That Wall Street Loves
Sequans Communications ( SQNS)
First on the list is a chipmaker, Sequans Communications. This company works in the fabless chip sector, designing and marketing chips and modules for both 4G and 5G systems, with a heavy focus on IoT applications. Sequans is a leader in the IoT chip market, leveraging seven generations worth of tech developments into its new designs. Sequans' revenue trended upwards in 1H20, moving from $8.7 million in Q1 to $12.2 million in Q2.
Covering the stock for B. Riley FBR, analyst Craig Ellis sees a solid foundation to support Sequans moving forward.
“While COVID-19 supply chain issues impacting supply and project launch timing as with many in the sector, we believe upcoming catalysts remain compelling even as long-standing stock overhangs clear. First, cash funding concerns are greatly diminished. Second, secular Critical and Massive IoT drivers seem on track, with some accelerated developments due to COVID, such as fixed wireless in the former and distanced monitoring and health care for the latter sometime in C21. Third, we believe Distribution and MCU partnerships are under-appreciated with potential for increasingly material and high margin revenue beginning in C21, and like signs of early progress such as development tool and SDK interest. A new distributor agreement is possible in 2H20. Overall, we believe SQNS is well positioned for rapid long-term growth..."
In line with this optimism, Ellis sets a $12 price target to back his Buy rating. This target implies a 98% upside for the stock in the next 12 months. (To watch Ellis’ track record, click here)
Wall Street’s overall agreement with Ellis is obvious – SQNS has 4 recent Buy reviews, making the Strong Buy analyst consensus rating unanimous. The stock is selling for $5.78, and the $10.63 average price target suggests room for a 75% one-year upside. ( See SQNM stock analysis on TipRanks)
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