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Mellanox Technologies Ltd. (Nasdaq:MLNX; TASE:MLNX), reported a strong fourth quarter and its outlook is even better, said Barlcays Capital analyst Joseph Wolf after the company published its financial report for the fourth quarter and full year of 2011. He reiterated its "Overweight" recommendation for the share, and raised his target price to $42 from $40.
Wolf said that Mellanox's revenue guidance for the first quarter of 2012 was an upside surprise. The $81-82 million reflects 12% mid-point growth over the fourth quarter. He raised his 2012 revenue estimate for the company to $342 million from $320 million, although he reiterated his non-GAAP earnings per share estimate of $1.54. He warned that the new guidance could raise expectations too high.
Mellanox's guidance is above the current market consensus of $72.6 million revenue for the first quarter.
Harel Finance reiterated its "Buy" recommendation and target price of $41 for Mellanox, and Clal Finance Brokerage raised its target price to $44.
Harel Finance analyst Rami Rosen says, "Mellanox's Ethernet business was especially strong and is expected to continue to grow. The rapid growth in the first quarter guidance is based on winning two large contracts, and the growth is expected to continue through the year."
Clal Finance Brokerage analyst Jonathan Kreizman said, "The bullish guidance is another sign of Mellanox's reliance on the HPC market.
Mellanox's share price rose 12.4% by mid-afternoon on the TASE today to NIS 134.20, after rising 13.8% in after-hours trading on Nasdaq, following the publication of its financial report.
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