Deutsche Bank Reports On Q2 Results For CAVM

Deutsche Bank, in reporting on Cavium Networks CAVM Q2 CY11 results, is also lowering its price target on the stock from $53 to $40. Says Deutsche Bank, in the report, “Decent Q2: revenues of $71.6m (up 13% sequentially and up 44% yearly) and $0.34 of PF EPS. Revenues were in line, while EPS was a 2c beat. The Q3 guide (revs: $73m - $74m; EPS: $0.33) was a slight miss on revenues and a penny above street. A solid +$500m design win funnel (according to management), combined with the potential for growth acceleration in CY12+ from next-generation IT equipment, merits our Buy rating. Our $40 Price Target (down from $53) reflects multiple compression and is based on our updated forward estimates.” Deutsche Bank, as aforementioned, is maintaining its Buy rating on CAVM. CAVM closed at $32.06 yesterday.