On Monday, B.Riley updated its view on Infinera Corp . (NASDAQ: NASDAQ:INFN), increasing the price target to $9.00 from the previous $7.50. The firm maintained its Buy rating on the stock. The decision came after evaluating the company's prospects and performance post-OFC, the optical networking and communication conference.
The analyst from B.Riley justified the revised price target with a higher EV/sales multiple of 1.7x, up from 1.5x, applied to their 2024 revenue estimate, after accounting for net debt. This change reflects a more optimistic outlook for Infinera's financial performance.
Infinera, a provider of Intelligent Transport Networks, appears to be outperforming in a challenging telecom market. B.Riley's analyst highlighted several factors that could contribute to the company's success. These include a series of new customer acquisitions, including Tier-1s, cloud operators, and subsea customers, which are expected to drive growth.
Additionally, the company's datacenter business is described as robust, and the ramp-up of pluggable solutions is anticipated to contribute positively. Vertical integration efforts are also expected to aid in expanding profit margins, according to the analyst's comments.
The analyst's remarks underline the company-specific catalysts that Infinera has in place to potentially exceed the overall industry growth despite the current soft telecom market.
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