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Piper Jaffray initiates coverage of Alvarion, spells out cautious market for WiMAX
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Piper Jaffray commenced coverage of Alvarion with an underweight rating and a $3 price target, which is well below the $4.49 closing price on Wednesday.
"While we believe Alvarion is well positioned as a WiMAX provider, we remain cautious on the ramp in Alvarion's WiMAX sales due to macro factors" and valuation concerns, T. Michael Walkley wrote in a research note. Alvarion has indeed been racking up the WiMAX contracts, including a $100 million contract with Open Range Communications earlier this month.
Walkley believes operators are likely to conserve capital in the second half of the year, and therefore the firm is remaining cautious about Alvarion's overall WiMAX sales in 2009.
The analyst also noted that existing technologies, primarily CDMA 1xEV-DO and WCDMA, are being expanded aggressively in emerging markets such as China.
"We believe these incumbent technologies have economies of scale and a diverse product portfolio for handsets which are essential for carriers to attract customers and recoup capital expenditure spent on the network upgrades," Walkley wrote. "We believe WiMAX will remain only in niche markets and we remain cautious on ramping WiMAX sales in 2009."
For more:
- see Barron's
Related articles:
Alvarion lassos $100M WiMAX deal with Open Range
Alvarion scores WiMAX contract for rural America
Comments
Posted by Avraham | July 2, 2009 - 12:49am
This is a 50 million target market cap to this company
3$ --> ~185M$ - 135M$ Cash = ~50M$
Did Piper Jaffray starting again to manipulate stock prices like they did at 2003?
Days will tell
Posted by WhyMAX | July 2, 2009 - 1:20am
They are right in their estimate that emerging tech (EVDO, HSDPA, UMTS, etc) have economies of scale that WiMAX does not. WiMAX requires complete change of Base Stations and other infrastructure while LTE can ride on existing backbone of the telco. Why will someone spend on new infra when the same RoI can be achieved at a fraction of the cost? Time to get over the WiMAX hype...
Posted by Anonymous | July 2, 2009 - 6:22am
pessimestic comment by WS indicate Bullish
bullish comment means WS are selling
Posted by Anonymous | July 28, 2009 - 8:10am
The comment by WhyMAX that LTE does not require an all-new IP backbone as WiMAX does is wrong. It takes exactly the same kind of change to an existing 2G or 3G network in order to convert it to LTE. Hence LTE (and WiMAX) are ideally launched as an overlay network. Reader WhyMAX probably confused LTE with EVDO, HSPA or HSPA+, all of which allow an upgrade without major disruption to the existing infrastructure. But even then, the new air interface throughput capabilities will probably require an updated backhaul, if more than a few customers are to enjoy the added speed.
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