Needham & Company Downgrades RadiSys (RSYS) to Hold

Needham & Company downgraded RadiSys (NASDAQ: RSYS) from Buy to Hold following Q4 results noting improving margins but no top-line growth.

Analyst Richard Valera commented, "The primary development on RSYS' 4Q14 call was its announced shift of investment toward growth products and away from legacy products, and the expectation of materially worse revenue in '15 than previously expected (due to faster legacy declines) but similar levels of profit. While we appreciate RSYS's efforts to develop growth products and cuts costs, we struggle with the expected overall top line decline for the next 2 years as the legacy business (~80% of 2014 revs and >100% of profit) continues to more than offset the growth of its Software business. As such, we downgrade to Hold from Buy."

For an analyst ratings summary and ratings history on RadiSys click here. For more ratings news on RadiSys click here.

Shares of RadiSys closed at $2.50 yesterday.

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