The departure of a second ViXS (TSX:VXS) exec in four months a headline that is “less than ideal”, but Cormark analyst Richard Tse thinks it doesn’t reflect any incremental operating issues at the company.
This morning, ViXS announced the departure of COO and interim president Hugh Chow.
“Coming off four consecutive quarters of revenue growth in fiscal 2015, we see tremendous growth opportunities ahead,” said chairman Peter Currie. “We have identified outstanding candidates for the CEO role and expect to make an announcement soon. The board and senior management are working closely together in the meantime. The board wishes to thank Hugh for his contributions since co-founding the company, and we wish him well in his future endeavours.”
Tse believes Chow’s departure has more to do with clearing the path for a new CEO, than anything else. He thinks investors should step back and look at the longer trends, which he believes reveals a company with clear advantages in an upcoming product cycle.
“At this level, we believe VXS is looking overdone despite the recent challenges,” said Tse. “We see the collective value of the company’s IP (522 patents), design win pipeline and tax losses valued at a multiple of the current market capitalization.”
In a research update to clients today, Tse maintained his “Buy (Speculative)” rating and one year target price of $4.00 on ViXS.