UPDATE: Piper Jaffray Downgrades Mellanox Technologies on Limited Upside

In a report published Thursday, Piper Jaffray analyst Andrew J. Nowinski downgraded Mellanox Technologies (NASDAQ: MLNX) from Overweight to Neutral, and lowered the price target from $65.00 to $45.00.

In the report, Piper Jaffray noted, “We are downgrading shares of MLNX to Neutral and lowering our price target to $45 (prev $65) as we see little upside to estimates going forward. The company delivered solid earnings upside in Q2, despite achieving only modest upside in revenue, which demonstrates the leverage that exists in the model. However, large Web/Cloud deals have remained elusive and continue to push out into future quarters. Moreover, we believe current operating expense levels are unsustainable and need to ramp up in order to effectively compete in the 100Gb/s market by 2014. Based on these factors, combined with limited visibility and a lack of known catalysts, we are downgrading shares of MLNX to Neutral and lowering our price target to $45.”

Mellanox Technologies closed on Wednesday at $47.79.