Tessera Technologies (TSRA) - Bear of the Day

Tessera Technologies (TSRA) is a provider of back-end technology for semiconductor manufacturing. The company's technology enables miniaturization of electronic goods, which is a driver of IC sales in the market today.

Consequently, the host of patents, new technologies, customer wins, volume production at customers, ongoing strength in the DRAM market and the licensing model that supports attractive margins are positives. However, protection of intellectual property (IP) for a company this small is a challenge, as are the inherent pricing pressures in the DRAM market.

We have lowered our estimates for the fourth quarter, considering the weak outlook. Additionally, we expect only slight sequential growth in each quarter of 2010, indicating another weak year. Consequently, we are downgrading TSRA shares from Neutral to Underperform.Zacks Investment Research