Most of the note actually reads fairly positively. “Over the past few years, Anadigics has been building some key, strategic relationships with industry leaders,” he writes.
In the handset space, the company has partnered with Qualcomm (NASDAQ:QCOM) on reference designs and currently generates nearly 40% of its revenue indirectly from Qualcomm. Despite chatter that TriQuint (NASDAQ:TQNT) or another [power amplifier] supplier is winning reference designs at Qualcomm, we believe Anadigics will remain the primary partner for upcoming 3G handset designs.
Shah says the company also has a strong relationship with Intel (NASDAQ:INTC), where the company should be a primary supplier for the Santa Rosa laptop platform. One negative, he says, comes from the set-top box business, where he thinks some cable operators may be sitting on several months of excess inventory built up in anticipation of the CableCard mandate which took effect July 1.
Shah maintains his $14 price target, based on a 25 P/E on estimated 2008 pro forma EPS of 56 cents.
ANAD 1-yr chart: