Analyst Downgrades: Ambarella, RF Micro Devices, Skyworks

Analysts downwardly revised their ratings on AMBA, RFMD, and SWKS

Dec 29, 2014 at 9:10 AM

Analysts are weighing in today on semiconductor names Ambarella Inc (NASDAQ:AMBA), RF Micro Devices, Inc. (NASDAQ:RFMD), and Skyworks Solutions Inc (NASDAQ:SWKS). Here's a quick roundup of today's bearish brokerage notes on AMBA, RFMD, and SWKS.

AMBA, which is best known for supplying video-processing chips to Wall Street newcomer GoPro Inc (NASDAQ:GPRO), soared 7.5% on Friday to settle at $55.94 -- bringing its year-to-date gain just north of 65%. However, the shares got hit this morning with a downgrade to "underperform" from "hold" at Needham, which cited lower gross margin expectations and a possible slowdown in revenue growth late next year. As such, Ambarella Inc is off nearly 5% ahead of the bell. This is likely music to the ears of short sellers. AMBA's short interest level rose 17% during the two most recent reporting periods, and now 28.5% of its float is dedicated to short interest. However, at the equity's typical daily trading rate, it would take fewer than three sessions to cover these bearish bets.

Needham also lowered its opinion on RFMD, cutting the stock to "hold" from "buy" despite its 224% year-over-year advance to rest at $16.73. As a result, the shares are pointed 1.4% lower in electronic trading. More broadly speaking, the brokerage bunch is bullish toward RF Micro Devices, Inc. Nine out of 13 covering analysts rate the security a "buy" or better. What's more, RFMD's consensus 12-month price target of $17.37 stands at a premium to the stock's 12-year high of $16.76, touched on Friday.

Finally, SWKS saw its rating reduced to "hold" from "buy" at Needham, as well. This, despite the shares' nearly 161% year-to-date advance to trade at $74.49. In the options pits, traders have displayed optimism toward Skyworks Solutions Inc. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 5.60 ranks in the 83rd percentile of its annual range. Ahead of the bell, SWKS is sitting 2% lower.

Follow @Schaeffers

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released!

Special Offers from Schaeffer's Trading Partners