) to overweight from neutral.
Analyst Sameer Doctor views the stock as significantly undervalued, despite risks around the adoption of MDoC. He expects the company to report 16 cents first-quarter earnings per share on $92.4 million in revenue on Apr. 20, compared with consensus estimates of 16 cents on $95.4 million, and guidance of at least 14 cents on more than $90 million.
He says gross margins should be in line, despite recent concerns on pricing pressures. He says M-Sys Flash Disk Pioneers entered the first quarter with a very clean inventory position, and an 8% to 10% quarter-over-quarter NAND flash ASP decline reported by Samsung is positive.
Doctor believes the next generation XBox could provide an upside to second-half 2005 numbers.