Jefferies Maintains RadiSys Hold Rating (RSYS)

Jefferies maintained its RadiSys RSYS Hold rating in a research report published today. Jefferies has previously given Radisys shares a price target of $10. In the report, Jefferies states, "We maintain our Hold rating on RadiSys shares as we don't think the risk/reward in the name is particularly compelling at this point. While the modestly improving outlook for the Next Gen Comms business helps, new concerns center on the Legacy Comms business which is now deteriorating at a faster pace. The Next Gen Comms business, of course, is the key revenue and profitability engine in the business. We're staying disciplined with our rating in light of: 1) revenue and margin pressure in the Legacy business; 2) customer concentration risk; and 3) inherent lumpiness in the Media Server business. Our target price remains $10.00. Our sum-of-the-parts analysis assumes: 1) no value for the legacy products; 2) $167 million in value for the Next Gen Comms business (or 1.0x 2012 sales); and 3) $79 million for the net cash in the business. We feel the discount multiple for the Next Gen Comms business is appropriate given its above industry growth rate, lower-than-industry-average operating margins, and above-average risk profile." Shares of RadiSys were at $8.94 in after hours trading at the time of posting, reflecting no change in the shares from Tuesday's market close.