We are downgrading Novatel Wireless (NVTL) to Underperform following its fourth quarter 2009 financial results, which were significantly below Zacks Consensus Estimates.
Novatel is facing intensifying competition for its core embedded solutions for wireless data access. Although Novatel has developed a niche for its MiFi mobile intelligent hot spot, we foresee increased competition as large firms like Qualcomm, ZTE and Huawei Technologies are on the verge of introducing their own version of intelligent mobile hot spots.
The company’s outlook was tepid. We do not find any immediate growth catalysts for Novatel and believe the company will incur losses for full-year 2010.Zacks Investment Research
