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Brean Starts Mellanox At Buy: Providing Horse Power To HyperCloud, Cloud, Web 2.0 And Big Data

Mellanox Technologies, Ltd. MLNX 1.28% is a provider of semiconductor and interconnect products, which facilitate data transmission between servers, storage systems, communications infrastructure equipment, and other embedded systems that enable high-performance computing, Web 2.0, storage, and the cloud.

Brean Capital’s Mike Burton initiated coverage of the company with a Buy rating and a price target of $55. The analyst expects Mellanox to generate healthy revenue growth in the back half of 2016 “as its key Data Center market starts to accelerate and its Spectrum Ethernet products ramp.”

Ahead In The Game

Mellanox was the first company to commercially develop InfiniBand technology, and has been consistently releasing products ahead of its main rival, Intel Corporation INTC 0.56% [Rated: Buy].

Analyst Mike Burton said that the company’s 56Gb/s and 100Gb/s InfiniBand products, which were “providing the “Horse Power” for HyperCloud, Web 2.0, and more powerful Enterprise Networks,” are expected to drive revenue growth in 2016. He expressed optimism regarding Mellanox being the first to release a 200Gb/s product, since the company is targeting to do so in 2017.

Expectations for Mellanox’s revenue and EPS growth have been reset, following the company’s quarterly report in March. Burton commented, “Going forward, we think revenue and EPS growth have been rationalized and that expectations are reasonable, as we look for the company to accelerate revenue in the 2H of 2016 as its key Data Center market starts to accelerate and its Spectrum Ethernet products ramp.”

May 2016Brean CapitalInitiates Coverage onBuy
Apr 2016DA DavidsonMaintainsBuy
Mar 2016MacquarieMaintainsOutperform

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