Goldman Says Sell UBNT

Price target $28. They could have had that price a week ago. Not the news to take us higher.



Here’s the Seeking Alpha Alert on the Goldman sell rating:

Ubiquitii -4.6% on bearish Goldman launch • 9:42 AM
Eric Jhonsa, SA News Editor

“We expect emerging market challenges that have increased since Ubiquiti’s December quarter guide down will outweigh new product launches and channel distribution,” says Goldman’s Kent Schofield, launching coverage on Ubiquiti (NASDAQ:UBNT) with a Sell rating and $28 target.

Schofield notes emerging markets make up “a substantial majority” of Ubiquiti’s revenue, and that a basket of eight EM currencies is down 8% Q/Q against the dollar. He expects EM channel partners to “hold less inventory in response to this volatility and implicit price increase.”

Schofiled also predicts Ubiquiti, known for keeping its costs down, will see opex grow as a % of sales, with R&D leading the way. In addition, enterprise Wi-Fi share gains are expected to slow, and China/India distribution is expected to “take time to ramp given less brand awareness.”

Too late? Ubiquiti had already fallen 41% from its March high of $56.85 as of yesterday’s close. Shares go for 14x FY16E (ends June '16) EPS.

Made me laugh. The guy across the hall at GS is busy buying.

GS is so predictable I may buy today on the drop.



Based on the experience with Goldman and analysts so far, this is an unequivocal sign to buy more :slight_smile: