(By Balachander) OCZ Technology Group Inc. (NASDAQ:OCZ) shares were downgraded to "Sector Perform" from "Outperform" by FBN Securities, following the data-storage company's quarterly results. The brokerage also lowered price target on the stock to $6 from $9.
Shebly Seyrafi, an analyst at FBN wrote the "quality of the report was quite weak". "The company had a revenue miss ($114M vs. $116M consensus), but the miss (and then some) were ascribed to a temporary shortage of power regulators late in the quarter," the analyst said.
Without the shortage, revenue could have been as high as $140M (which was the bookings number), but then the revenue guidance could have been perhaps $26M lower, Seyrafi added.
Seyrafi wrote OCZ's European revenue growth is decelerating (from 51 percent in FQ4 to 27 percent in FQ1) as sales grew only 1 percent Q/Q. Note that OCZ has a relatively high exposure to Europe with 46 percent of revenue from this region.
"OCZ is still guiding for revenue in F2013 of $630-700M, but we see $578M (up 58 percent Y/Y) as more realistic," the analyst said. "We think that OCZ's bar is too high."
San Jose, California-based OCZ posted a non-GAAP net loss of 17 cents a share on revenue of $113.6 million for the second quarter.Non-GAAP gross margin fell to 25.2 percent from 20.0 percent in the same period of last year.
On Wednesday, shares tumbled 17.25 percent to trade at $4.51. In the 52-week period, the stock has been trading between $4.14 and $10.94.