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Bear of the Day

Tessera Technologies (TSRA) is a provider of back-end technology for semiconductor manufacturing. Protection of intellectual property (IP) for a company this small is a challenge, as are the inherent pricing pressures in the sluggish DRAM market.

There is significant near-term risk to revenue, leading us to downgrade the shares to Underperform. First, Micron -- a major customer -- was due to renew its license in May, but there is still no news that this has been done. Tessera is also in legal battles with other big customers, such as Amkor and Powertech.

We therefore have an Underperform rating on TSRA shares. Our target price of $13.00 (34.2X P/E) is a discount to the peer group. It carries a Zacks #4 Rank (Sell) currently.

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