Several headwinds could force Sierra Wireless (SWIR) to post a conservative 2008 guidance, says Raymond James equity analyst Sera Kim in a research note to clients on Monday.
Ms. Kim says that component shortages, a delay in a next-generation product release due to litigation one of its suppliers is facing and a number of retail store closures in the U.S. by Sprint (S) will impact Sierra Wireless' business in the near term.
However, Ms. Kim writes, looking further down the road, Sierra Wireless maintains a number of positive aspects that could affect the stock price that are worth highlighting. Competitve product offerings, a strong balance sheet and a discounted valuation proves that the company is strong enough to weather any minor short-term storms.
Ms. Kim maintains an 'outperform' rating with a $26 price target.