Needham & Company Downgrades Smith Micro Software (SMSI) to Hold

Needham & Company downgraded Smith Micro Software (NASDAQ: SMSI) from Buy to Hold.

Analyst Richard Valera commented, "On 10/13, SMSI pre-announced weaker than expected 3Q15 results and substantially reduced its 2015 revenue guidance. While we had already been modeling below prior guidance, the magnitude of the reduction is surprising to us and suggests a disappointing level of follow-on business from Comcast, as well as lack of timely closure of new deals, which management attributed to "consolidation and restructuring in the carrier and cable operator space." We see the muted reaction of SMSI shares to the miss as perhaps embedding some level of expectation of a new deal(s) being announced in relatively short order, and we view the 0.6x EV/Sales as fair for a company that has failed to deliver meaningful quarterly revenue growth for the last 6 Qs (including implied 4Q15) and is operating at ~b/e profitability. As such we downgrade to Hold from Buy."

For an analyst ratings summary and ratings history on Smith Micro Software click here. For more ratings news on Smith Micro Software click here.

Shares of Smith Micro Software closed at $0.80 yesterday.

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