Conservative on TriQuint Semi

Jun 20, 2008 (Zacks Investment Research via COMTEX) -- TQNT | Quote | Chart | News | PowerRating -- We are cautiously optimistic of TriQuint Semiconductor, Inc.'s (TQNT) projected path to margin improvement and inventory correction. Therefore, we maintain a Hold rating on the stock. The company's wireless products are sold to all three major air interfaces: code-division multiple access (CDMA), global system for mobile communications (GSM), and time division multiple access (TDMA). Wireless enabled laptops are estimated to aggregate about $300 million in the radio frequency (RF) market in 2008. The RF content is increasing, with new standards that provide greater bandwidth, higher data rates, and better quality of service. On the other hand, WiMAX is in the early stages of deployment and will be an important market for TQNT in the future. However, the company faces strong competition in every product category and also has significant customer concentration. Going forward, management expects revenues around $130-$135 million in the second quarter. GAAP EPS is expected to come around $0.05 to $0.07 while pro-forma EPS should come around $0.07 $0.09. Given the updated guidance, we had adjusted our revenue and earnings estimates for the second quarter and fiscal 2008. The shares are currently trading at 14.9 times our 2008 EPS estimate. We have derived a price target of $7, which implies a P/E multiple of roughly 16.3x our pro-forma EPS estimate of $0.43 for fiscal 2008. Read the full analyst report on TQNT

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