Sierra Wireless Posts Solid Q2 Earnings, Canaccord Reiterates A Big Buy

Sierra Wireless, Inc. (NASDAQ: SWIR) reported its second-quarter results Thursday evening. Earnings per share and sales both beat consensus estimates. The company also issued guidance for the third quarter on the higher end of analysts’ expectations.

The Analyst

Canaccord Genuity’s T. Michael Walkley reiterated a Buy rating and $28 price target.

The Thesis

“We maintain our belief Sierra Wireless is well-positioned to benefit from long-term [Internet-of-Things] industry growth trends,” said Walkley in a note.

Walkley expects to continue seeing solid demand from Sierra Wireless’ top customers and win new projects with in the automotive, energy and transportation industry.

Notably, the analyst sees Low-Power Wide-Area (LPWA) product shipments rising from $200 million this year to over $1 billion in 2019.

The company’s margins are expected to continue growing over the same period, driving potential for further upside. Shares jumped 20 percent after Friday’s open before pulling back slightly to trade in the high-$18/low-$19 handle.

Price Action

The stock traded around $19.45 at time of publication, up 20 percent on the day.

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Photo courtesy of Sierra Wireless.