Hittite Microwave Still Hot

Hittite Microwave Corp. (HITT - Analyst Report) is a leader in integrated circuits, modules and subsystems for wireless communications. The company has a broad product portfolio across a large portion of the frequency spectrum, including radio frequency (RF), microwave and millimeterwave.

Hittite is poised to grow from its international business, focus on new products and deeper penetration into existing customers. The company reported a strong first-quarter and we still expect double-digit revenue growth for the full year. We therefore maintain our Buy rating on the shares.

Hittite is currently trading at 21.3x our estimated 2008 EPS of $1.75. Although a premium to its peers on an absolute P/E multiple, its stronger growth rate makes the stock look more attractive with a PEG ratio of 0.9. Our $55 price target is a multiple of approximately 27.6x our 2009 EPS estimate of $1.99, a reasonable valuation considering its growth rate and potential size of its addressable market.

Read the full analyst report on HITT