Analysts Give Confusing Update on Sierra Wireless, Inc. (NASDAQ:SWIR)

Sierra Wireless, Inc. (NASDAQ:SWIR)

Sierra Wireless, Inc. (NASDAQ:SWIR) achieved something of a rarity today – its shares were downgraded from “Outperform” to “Market Perform” but the price target was raised from $23.50 to $30.00. The market decided that the downgrade was of more importance than the revised target price and SWIR shares were down almost 7% at the close of trading. Volumes were heavy. SWIR has an average daily trading volume of less than 480,000 shares but over 1.1 million shares traded hands today.

Some analysts also believe that a pause in performance may have been around the corner. YTD SWIR has gained over 76%, for the year SWIR shares are up over 108%, and for the last quarter SWIR shares are up over 68%. Given the  rapid ascent of Sierra Wireless, Inc. (NASDAQ:SWIR), many say it could be time for the shares to take a breather. Further justification was that the recent contracts the company has secured are with major players and may cut into margin expansion.

The “Internet of Things” describes the connectivity between consumer and commercial technologies to a wireless network by embedding them with electronic, software, or sensor technology. This wireless connectivity moves society towards a world where less human-to-human interaction is required to achieve the same results. Remotely turning on your house lights, a “smart” thermostat, an engineer receiving an email about a broken valve in a municipality’s water filtration plant, or electronic quality control communications concerning a manufacturing line – all are examples of the “Internet of Things”. According to one source this market is set to at least double by 2020 – to $1.7 Trillion.

Since launching the world’s first cellular embedded module in 1997, Sierra Wireless, Inc. (NASDAQ:SWIR) has shipped over 100 million devices to connect the Internet of Things. Sierra has been first-to-market with the world’s smallest module, embedded software, embedded SIM, interchangeable modules and 4G LTE solutions to name a few. They produce products for the energy, industrial municipal, healthcare, and automobile sectors – to name a few.

SWIR shareholders have seen steady improvement in sales figures. In 2011, Sierra Wireless, Inc. (NASDAQ:SWIR) sales were reported at $333.2 million but reached $615.6 million in 2015. EPS, prior to 2016, was never positive. SWIR lost $1.62 EPS in 2011 but that loss narrowed in 2015 to -$0.08 and finally turned positive in 2016 when SWIR shares had an EPS profit od $0.48. Five firms follow SWIR shares. One rates SWIR shares as a “Strong Buy”, one rates the shares as a “Buy”, two rate SWIR shares as a “Hold”, one rates the shares as a “Sell”.

Ticker Symbol SWIR
Last Price a/o 4:00 PM EST  $                    27.70
Average Volume                    479,000
Market Cap (mlns)  $                  904.13
Sales (mlns) $615.60
Shares Outstanding (mlns) 32.64
Share Float (mlns) 31.72
Shortable Yes
Optionable Yes
Inside Ownership 6.60%
Short Float 1.70%
Short Interest Ratio 1.12
Quarterly Return 68.90%
YTD Return 76.43%
Year Return 108.43%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance.

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James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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