Mellanox Technologies Ltd. sank the most since January in New York as Mizuho Securities USA Inc. and Needham & Co. downgraded the stock after the Israeli company forecast revenue that was below analysts’ estimates.
Shares of the maker of data transferral and storage software fell 13 percent to $53.61 by 12:11 p.m. in New York, set for the biggest one-day drop since Jan. 3. The company led a 0.8 percent decline in the Bloomberg Israel-US Equity Index of the 25 largest Israeli companies traded in the U.S. Mellanox slid 7.9 percent in Tel Aviv to 203.10 shekels, or $56.30.
Needham and Mizuho cut their recommendations on the Yokneam Elit, Israel-based company, boosting the tally of analysts rating Mellanox the equivalent of hold to 10 of 18, data compiled by Bloomberg show. Second-quarter sales will be as much as $97.5 million, the company said yesterday after markets closed, trailing the $108 million average of 14 analysts’ estimates compiled by Bloomberg.
“There’s some disappointment as far as outlook was concerned,” Rajesh Ghai, a Dallas-based analyst at Craig-Hallum Capital Group Ltd. who has a hold rating on Mellanox, said by phone. “Demand is weak and visibility doesn’t seem too high.”
Mellanox does not expect any “large deal” in the current quarter, Chief Executive Officer Eyal Waldman said on a conference call yesterday.
Shares have slumped about 55 percent in New York from a record-high reached Sept. 6. Mellanox, which gained 83 percent in 2012, reported earnings that beat estimates every quarter since its initial public offering in 2007.