IDT's base business is stable, with growth being led by AMB, search engines, and gaming clocks. The next leg of growth will include PC audio, comm clocks, PCI-express, and pre-processing switches. The company previewed its newest products for PC display, digital TV, and handset I/O.
There was no update to the outlook. However, IDT indicated that it believes it would see a return to growth in the second half of CY07, driven by PC seasonality and a renewed growth in gaming, with wireless a wild card. Margins should improve with higher utilization.
Firm says IDT tweaked its long-term targets, lowering gross margin to 55%-58% but retaining operating margin targets at 25%-30%. Firm believes IDT will soon begin moving back towards those ranges, and maintain a very positive view of growth and market share gain opportunities. IDTI remains a favorite.
Notablecalls: There are several positive comments on IDTI today after the analyst day. Looks like the management was convincing enough to make the analyst community believe that the growth is returning and margins are improving. Let's see if the buy-side is as positive on the name as well. I believe they do and we are going to see upside in the stock over the next few days. Unless the ugly tape of yesterday continues, of course.