Spectra7 gets $1.10 price target at Mackie Research

Spectra7 Microsystems’ (Spectra7 Microsystems Stock Quote, Chart, News: TSXV:SEV) opportunity is not limited to the virtual reality space, but the company could be a major benefactor of its imminent rollout, says Mackie Research Capital analyst Nikhil Thadani.

In a research report to clients yesterday, Thadani initiated coverage of Spectra7 with a “Speculative Buy” rating and a one year price target of $1.10, implying a return of 67% at the time of publication.

Markham-based Spectra7 Microsystems builds integrated circuits that make electronic products smaller, lighter and faster. Thadani says both the augmented reality and USB C cable spaces are multi-billion dollar markets the company could address, but says that virtual reality is a market in which it could benefit in much the same way chip maker Ambarella, an image processing and video compression solutions provider for GoPro, did when GoPro cameras became a hit.

“Multiple tethered consumer VR headsets from various providers such as Oculus Rift (Facebook), HTC and Sony are expected to come to market around the holidays and Q1/16,” notes Thadani. “In addition, there is speculation that Google and Apple could eventually seek to actively enter this market, even furthering consumer adoption as well regarded technologists consider VR to be a potentially computing landscape altering development.”

At press time, shares of Spectra7 Microsystems were down 3% to $0.65.