In a report issued on July 23, Dave Kang from B.Riley FBR maintained a Hold rating on Acacia Communications (ACIA), with a price target of $70. The company’s shares closed yesterday at $64.99, close to its 52-week high of $66.24.
Kang noted:
“We are upgrading and raising price target from $4.75 to $6.00, as Cisco System’s (CSCO) acquisition of $2.6B has validated the value of the coherent DSP (Digital Signal Processing) technology. On July 9th, CSCO rocked the optical industry by announcing its intent to acquire ACIA for $2.6B or $70 per share in cash (4.4x EV/sales). Although most of ACIA’s revenues are derived from modules, ACIA’s core competencies are DSP and SiPh (Silicon Photonics) technologies. Since CSCO already spent $660M to acquire Luxtera’s SiPh technology earlier this year, we would argue that most of the $2.6B purchase price was for ACIA’s DSP technology.”
According to TipRanks.com, Kang is a 5-star analyst with an average return of 19.6% and a 64.4% success rate. Kang covers the Consumer Goods sector, focusing on stocks such as DASAN Zhone Solutions Inc, Applied Optoelectronics, and Luna Innovations Inc.
Acacia Communications has an analyst consensus of Hold, with a price target consensus of $65.56, representing a 0.9% upside. In a report issued on July 9, Piper Jaffray also downgraded the stock to Hold with a $70 price target.
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Based on Acacia Communications’ latest earnings release for the quarter ending March 31, the company reported a quarterly net profit of $6.98 million. In comparison, last year the company had a GAAP net loss of $3.25 million.
Based on the recent corporate insider activity of 122 insiders, corporate insider sentiment is negative on the stock.
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Acacia Communications, Inc. is engaged in the development, manufacture, and sale of high-speed coherent optical interconnect products that are designed to transform communications networks through improvements in performance, capacity, and cost.
