Prudential initiated coverage of UTStarcom (UTSI) with buy.
Analyst Inder Singh says he believes UTStarcom will likely maintain its strong sales and earnings momentum. He cite the company's leadership in wireless personal-handyphone systems in China, a strong backlog, and excellent visibility. He notes UTStarcom is the dominant personal-handyphone systems vendor in China with about a 60% market share.
He says UTStarcom has enjoyed strong demand for its phones, driving revenues to $982 million in 2002, from $188 million in 1999. He believes the surge in personal-handyphone systems deployments suggests this technology has staying power as an alternative to cellular. Singh sees $1.52 2003 earnings per share, and $1.83 for 2004; he also set a $47 target.