Novatel Upgraded to Buy

We upgrade our rating to Buy for Novatel Wireless Inc. (NVTL - Analyst Report), a leading provider of wireless data access cards and embedded solutions. This follows an assessment of recently reported first quarter 2009 financial results above our estimates, along with increased demand for embedded products together with effective cost-control measures.

The recently launched series of next-generation products, particularly the MiFi line of intelligent mobile hotspots, are likely to further improve overall financials. In addition, the company has a strong balance sheet and financial guidance provided by management is considered encouraging.

We believe the recently launched MiFi product line, and expected commercialization of several new 3G USB modems, may improve Novatel’s overall revenue opportunities. Efficient management of the company's cost structure is also likely to benefit earnings power in future reporting periods.