) posted a $0.03 Q1 loss vs. a $0.22 loss one year earlier on a slight revenue rise. Needham upgraded its rating on the shares to buy from hold.
Analyst Glenn Hanus believes the odds favor slow continuing improvement of the company's fundamentals over the next year, which he believes is not yet reflected in the stock. Hanus notes he had a $0.06 loss estimate. He says Q1's 42.1% gross margin vs. his 40.3% estimate reflects a favorable product mix with sales of high margin 9840 and VSM tape products above his estimate.
Hanus believes the company's new CEO and his team are taking appropriate steps to improve execution and to restore growth and profitability. He raised his $0.54 2001 EPS estimate to $0.55, and sees $0.90 in 2002. The analyst set a $16 six-to-12 month price target.