ViXS Systems is staying ahead of the curve, says Cantor Fitzgerald’s Abernethy

Late in December, Samsung unveiled its 110-inch UltraHD TV. A series of product and design announcements from ViXS Systems (TSX:VXS) this week provides further validation that the company is well positioned to take advantage of media and communications trends, says Cantor Fitzgerald Canada analyst Blair Abernethy.

On April 1st, ViXS expanded its UltraHD 4K offering by adding XCodePro 330 and XCodePro 320, a pair of professional decoder products aimed at infrastructure markets. The announcement was followed by more decoder news on Wednesday, and two more such releases today.

John Pomeroy, vice-president, sales infrastructure and networking at ViXS, explained the importance of first announcement.

“Our new generation of decoders including the XCodePro 320 and XCodePro 330 are driving ViXS to quickly become the accepted standard for quality, performance and low power in hardware HEVC decoding applications,” he said.

High Efficiency Video Coding (HEVC) is a video compression standard that is a successor to H.264/MPEG-4 AVC (Advanced Video Coding).

Abernethy says recent information from competitors suggests VIXS is about to be in the sweet spot of the market. On its recent Q4 earnings call, he says, Broadcom noted that UltraHD appears to be gaining market acceptance, with some 50-inch models now priced under $1000. And Entropic management said it is now sampling 4K and HEVC capabilities and expects that UltraHD will materially contribute to its revenue in the second half of fiscal 2014 and into 2015.

In a research update to clients this morning, Abernethy maintained his BUY rating and $5.00 one-year target on ViXS Systems.

Shares of ViXS closed today up 4.5% to $2.09.

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