NEW YORK (Dow Jones)–Shares of Sigma Designs Inc. (SIGM) shot up 15% Wednesday, a day after Microsoft Corp. (MSFT) and major television set-top-box makers said advanced system-on-a-chip set-tops were available to support Microsoft’s Internet Protocol television software.
All advanced Internet Protocol set-top boxes supporting Microsoft’s IPTV Edition software platform are based on Sigma’s System-on-Chip technology, said Tristan Gerra of Robert W. Baird, adding it’s “payoff time” for Sigma, a Milpitas, Calif., digital-video-encoding and decoding company.
Set-tops supporting IPTV made by Cisco Systems Inc. (CSCO), Motorola Inc. (MOT), LG Philips LCD Co. (LPL) and Tatung Co. (2371.TW), enable service providers to deliver high-definition television, digital video recording and picture-in-picture viewing.
Gerra reiterated his outperform rating and $21 price target and said the set-tops “should provide significant momentum to Sigma’s top line this quarter and next.”
He said in a note that he is also bullish on Sigma’s all-CMOS-based Ultrawideband chipset, which allows wireless streaming of high-definition television content from any host system including personal computers, set-tops or DVD players, to one or several television sets at the same time. CMOS is a class of integrated circuit.
Gerra also said the stock has compellingly low valuation.
Sigma shares were recently up $2.23, or 15%, at $17.06, with 3.5 million shares traded – nearly six times average daily volume.
Baird and its affiliates expect to receive or intend to receive investment-banking related compensation from Sigma within the next three months, and the firm prohibits analysts from holding shares in companies they cover.
