Copyright 2007 AFX News Limited
AFX – Asia
March 21, 2007 Wednesday 8:01 PM GMT

NEW YORK (AP) – Shares of Vyyo Inc. jumped 26 percent on Wednesday after an analyst started coverage of the communications equipment company, seeing solid prospects ahead.

Janco Partners analyst Cameron Cooke said in a note to investors Vyyo is in a good place to benefit from growing capital spending by cable operators, as they compete with telecommunications companies and others for customers.

Cooke initiated coverage of the Norcross, Ga., company with an ‘Accumulate,’ or ‘Buy,’ rating and a target price of $15.

Vyyo’s shares jumped $1.30, to close at $6.30 in heavy-volume on the Nasdaq Stock Market, having changed hands between $3.03 and $8.34 in the past 52 weeks. The stock hit as high as $7 earlier in the session.

The company, Cooke wrote, has a ‘unique solution’ for cable operators that lets them increase the bandwidth of their hybrid fiber/coaxial networks so they can better compete with telecom and satellite companies’ video and data offerings.

Cable networks are experiencing bandwidth constraints as their customers demand faster and more powerful networks, due in large part to the growing popularity of online video, which eats up far more bandwidth than, for example, e-mail.

Vyyo’s ‘relatively inexpensive solution will allow them to upgrade their networks incrementally rather than taking a quantum-leap in capital expenditures by going with a Fiber-to-the-Home solution,’ the analyst wrote.

Cooke expects Vyyo to post 2007 revenue of about $39 million. Two other analysts polled by Thomson Financial have disparate estimates, with one forecasting revenue of $25 million and the other projecting sales of $44.8 million.

‘We believe revenues could be substantially higher if another major customer is signed in any of its cable products,’ Cooke wrote.