Friday, January 14, 2011

DragonWave (NASDAQ:DRWI) Gets Crushed on Weak Guidance

With DragonWave (NASDAQ:DRWI) giving weak guidance with little explanation as to the why of it, the share price got hammered Thursday, although the assumption is the plunge in revenue from Clearwire (Nasdaq:CLWR).

Canaccord says, "We maintain our BUY recommendation following DragonWave’s disappointing FQ4 guidance that was provided along with its FQ3 results. As the company did not provide much detail behind the guidance levels, except to say that there is a lack of visibility with current and expected projects, we have to surmise that the primary driver is Clearwire (Nasdaq:CLWR) revenue declining to almost nil, but await the conference call for further detail. We will re-examine our estimates and valuation following the call as we await further information."

Canaccord Genuity reiterates a "Buy" rating on DragonWave, which closed Thursday at $7.25, plummeting $1.41, or 16.28 percent. Canaccord has a price target on them of $11.

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