Independent Research Group analyst Erik Zamkoff initiated coverage of SeaChange International Inc. with a "buy" rating and a 12-month price target of $15 12, citing an acceleration in video-on-demand deployments.
SeaChange makes VOD servers that allow cable operators to store and deliver digital video streams for VOD, advertising insertion, and broadcast video.
With over 60% market share of video streams deployed, SeaChange looks poised to take advantage of continued growth as more cable operators roll out VOD service. Zamkoff also believes that ad insertion and broadcast revenue — on the decline in the year's first half — has stabilized.
He said he expects sequential revenue growth throughout 2004 and 2005.