abh3vt

Investor Assesses China Techfaith Wireless' Weak Stock Performance (CNTF)

I can't understand the drop either. Guidance for Q3 was for revenues to be up 10-15% sequentially from Q2 with similar net income margins as in Q2 (45%). For whatever reason, the two analysts who follow the company have lowered their expectations for FY05 and FY06 in the past few weeks. The new expectations can be found here:

tinyurl.com/7l44a

They still expect strong y/y growth in FY06 of roughly 30%. Stock is trading at 8x FY06 estimates. Looks cheap to me, esp. with $3.00/share in cash on the balance sheet.

Why did they cut estimates?? Who knows. The company did say that they had fewer design wins during Q2 than in Q1, so perhaps that is fueling some fear that revenues and eps will not be as strong in coming quarters.

Other concerns? There will be a lot of shares coming off lock-up in November, but there have been no Form 144 filings showing intent to sell.

Looks really oversold to me, but without news regarding business and current trends, the stock will sink in this vacuum. Very frustrating.