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07/03/15 04:00:55 PM
WORD ON THE STREET

Ambarella, Inc., Vertex Pharmaceuticals Incorporated, Chesapeake Energy Corporation

Ambarella, Inc.(AMBA) : Chardan's Managing Director of Equity Research, Jay Srivatsa, said in a note that Ambarella Inc (NASDAQ: AMBA)'s acquisition of Vislab extends the company's "available market," but will not bring in "material product revenues" until 2017. Srivatsa said that it may take 18 to 24 months before the company can integrate Vislab's technology into its current solutions. Ambarella paid $30 million in cash to acquire Vislab, a company that "developed computer vision and intelligent control systems for automotive and other commercial applications." Srivatsa said that Ambarella's "success may come from the enhancements that computer vision offers" its existing solutions in the IP security, wearable and flying camera markets. Related Link: VisLab Acquisition Part Of Stifel's Upside Thesis For Ambarella Chardan said that Ambarella is "fairly valued" at current prices, though it reaffirmed a 12-month price target of $90, roughly 10 percent below the $101 price the stock is currently trading at. The firm said it remains "cautious on future upside for investors," an outlook that prompts them to "stay away from upgrading the stock to a Buy rating near term." Recently, Ambarella has hit a rough patch, falling from highs above $128 to $100. However, year-to-date, the stock is up sharply, rising nearly 100 percent in the first half of 2015. View More Analyst Ratings for AMBAView the Latest Analyst Ratings Write to editorial@benzinga.com with any questions about this content. Subscribe to Benzinga PRO: http://pro.benzinga.com 2015 Benzinga Newswires. Benzinga does not provide investment advice. All rights reserved.



Vertex Pharmaceuticals Incorporated(VRTX) : Shares of Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) were trading higher by nearly 4 percent on Thursday after the FDA approved the company's Orkambi (lumacafor/ivacaftor) for the treatment of cystic fibrosis patients 12 years and older. Commenting on the FDA's approval, Terence Flynn, PhD of Goldman Sachs noted that the timing and decision by the FDA was in-line with the July 5 PDUFA date and follows the FDA AdCom's 12-1 recommendation for approval in May. Flynn noted that the drug's label is not yet available, but based on the FDA AdCom he isn't expecting any surprises. The analyst also added that pricing of Orkambi is not yet available, but is expected to be on par with Kalydeco ($312,000 a year) in the U.S. given a strong secondary endpoint data. Other reasons to support the $312,000 per year cost includes the fact that the analyst is not aware of any precedents to significantly cut prices on already approved drugs and an analysis of historical orphan drug pricing. Looking forward, the analyst is now expecting investor focus to shift to the drug's launch trajectory and the company's earnings power. The launch is expected to boost the company to profitability and the analyst is now modeling the company to report a non-GAAP earnings per share of $6.54 in 2016 and $9.75 in 2017. Shares remain Buy rated with an unchanged price target of $142 based on a 70/30 percent blend of DCF ($133) and M&A ($165). View More Analyst Ratings for VRTXView the Latest Analyst Ratings Write to editorial@benzinga.com with any questions about this content. Subscribe to Benzinga PRO: http://pro.benzinga.com 2015 Benzinga Newswires. Benzinga does not provide investment advice. All rights reserved.



Chesapeake Energy Corporation(CHK) : Following new reports that Chesapeake Energy Corp (NYSE: CHK) subsidiaries are in the process of selling $840 million of Anadarko Basin assets, Wunderlich analyst Jason Wangler took a look at Chesapeake's continuing efforts to simplify and improve its balance sheet. Wangler believes that opportunistic buyers of Chesapeake's stock at recent low prices will be rewarded in the long run. The sale of the Anadarko Basin assets to privately-held FourPoint Energy LLC could potentially reduce Chesapeake's CHK Cleveland Tonkawa LLC liability. Although a price of $40,000 per flowing boe is well below the price the assets would have fetched a year ago, Wangler believes the move is bullish for the stock, as it provides a much-needed boost to the company's balance sheet without sacrificing much of the upside potential in Chesapeake's core assets. One of the major fears in the market surrounding Chesapeake is that the company will continue to out-spend its cash. However, Wangler does not see cash as an immediate concern. "Considering that the company has $3 billion in cash and an undrawn $4 billion revolver, we believe these concerns are overblown; but, more importantly, as the year moves on we look for CHK to be near cash flow breakeven even in a weak commodity environment, though admittedly production will decline with lower activity," Wangler explains. Wunderlich sees Chesapeake's current depressed share price as a major buying opportunity. The stock is currently trading at just 3x 2016 estimated price/cash flow per share (P/CFPS), about half the 6x multiple of its peers. Wunderlich has a Buy rating on Chesapeake and a $24 target for the stock. View More Analyst Ratings for CHKView the Latest Analyst Ratings Write to editorial@benzinga.com with any questions about this content. Subscribe to Benzinga PRO: http://pro.benzinga.com 2015 Benzinga Newswires. Benzinga does not provide investment advice. All rights reserved.



 

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