UPDATE: D.A. Davidson Upgrades RF Micro Devices On Ramping Revenues, Strong Margin Expansion

D.A. Davidson has upgraded shares of RF Micro Devices (NASDAQ: RFMD) from Neutral to Buy and raised the price target from $8.50 to $11 after the company reported strong fourth quarter results and strong first quarter guidance.

Analyst Thomas Diffely upgrade is based on “ramping revenues and a better than expected margin expansion story.”

RF Micro Devices' guidance of 19 percent revenue growth to $305M came in way above analyst estimates of $277 million, but what is more encouraging to Diffely is the “non-GAAP gross margin guidanec of 43.5%-44%.”

The analyst is projecting full year 2015 revenue will grow “at a higher clip than the previously guided 10%,” due to exposure to China's 4G LTE buildout and key product launches from Apple (NASDAQ: AAPL).

The stock is up 6.9 percent to $8.65. The $11 price target represents 27 percent upside from current levels.