July 19 (Bloomberg) -- Mellanox Technologies Ltd., the Israeli maker of technology used to transfer and store data, climbed to the highest level on record as its third-quarter sales forecast surpassed estimates.
The shares soared 47 percent to 373.80 shekels, or the equivalent of $92.93, at the close in Tel Aviv. Mellanox, with a market value of 14.9 billion shekels ($3.7 billion), is the sixth-heaviest weighted stock on the TA-25 index. The gauge climbed 2.1 percent. The U.S. shares surged 39 percent to $92.49 at 9:52 a.m. in New York.
The third-quarter sales outlook beat expectations by as much as $50 million, according to the mean estimate of 12 analysts surveyed by Bloomberg. Revenue will continue to rise as Mellanox benefits from mounting demand for cloud technology, said Mizuho Securities USA Inc. The market for cheaper storage solutions is expected to climb to $10.5 billion in 2014 from $3.7 billion last year, according to Gartner Inc.
“The company still blew our aggressive forecasts away,” Jonathan Kreizman, an analyst at Clal Finance Batucha Brokerage Ltd., said in an e-mailed note today. “We believe Mellanox is about to experience a strong growth period.”
Mellanox, based in Yokneam Elit, Israel, reported adjusted earnings per share of 99 cents, more than the 73.5-cent mean estimate of 11 analysts. Its sales for the three months ending June 30 more than doubled over the same period last year. Third-quarter sales will reach $150 million to $155 million, the company said in a conference call with analysts yesterday. The outlook beat revenue expectation of $104 million.
ThinkEquity LLC raised its price estimate for Mellanox to $120 from $81 today, while Wunderlich Securities Inc. lifted the share-price forecast to $150 from $85.
“This is a company finding itself in a very unique position where the demand for their technology is increasing at a rapid pace and they have no competition,” Ruben Roy, an analyst at Mizuho, said by phone from New York yesterday. “The management team is executing remarkably well and you have got one of the most interesting niche technologies.”
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