Actually this downgrade will help on next earnings. Could see a FIO type blowout!
OCZ Technology shares slip after analyst downgrade
August 15, 2012
LOS ANGELES — Shares of flash memory maker OCZ Technology were down slightly Wednesday after an analyst downgraded the stock, citing increased competition from Micron Technology Inc., Seagate Technology PLC and Intel Corp. in the field of solid-state drives.
THE SPARK: Sterne Agee analyst Alex Kurtz cut his rating on the stock to "Neutral" from "Buy," saying that competitors were likely to introduce a broad array of products that would compete with OCZ at next week's Flash Memory Summit.
Kurtz said in a research note that over the past few years, OCZ was able to take advantage of "timid" product launches by Micron, Seagate, Intel and others in the market for solid-state drives that connect through certain ports in computers.
However, that particular market is approaching $6 billion in annual revenue, suggesting that other companies will "begin to take a more aggressive stance," Kurtz said.
THE BIG PICTURE: OCZ designs, makes and distributes high-performance solid-state drives, which lack moving parts such as a spinning disc, and are therefore popular in mobile devices. Its clients include enterprise customers and original equipment manufacturers. The company is based in San Jose, Calif.
THE ANALYSIS: Partly because of increased competition, Kurtz cut his estimate for fiscal 2013 earnings per share to 9 cents on revenue of $639.6 million. That's down from his previous earnings-per-share estimate of 23 cents on $667.6 million in revenue. He also trimmed his outlook for fiscal 2014. Analysts polled by FactSet forecast fiscal 2013 earnings per share of 11 cents on revenue of $645.3 million, on average.
SHARE ACTION: Shares of OCZ Technology Group Inc. were down 6 cents, or 1.3 percent, at $4.78 in midday trading Wednesday while the broader markets rose. They are down from a 52-week high of $10.05 reached in February.
