) to outperform from buy.
Analyst Greg Mesniaeff says he downgraded SeaChange based on its 62% price appreciation since June 20, as well as his belief that valuation almost fully discounts its near-term video-on-demand revenue opportunity. Also, Mesniaeff notes his slight but growing concern about the current state of the video advertising insertion business.
He trimmed the fiscal 2002 (Jan.) ad insertion sales estimate and corporate gross margin assumptions, bringing his $0.05 fiscal 2002 EPS estimate to $0.02. Mesniaeff says while SeaChange continues to gain market share, he thinks the overall strength of the segment is being negatively impacted by softness in cable ad spending.