Zoran: Cash Limits Downside, Significant Upside as Profitability Recovers

A San Francisco presenter believes Zoran (NASDAQ: ZRAN, $10.85) is poised for a substantial upside at this level. The company designs chips for TV's, DVD's, set-top boxes, printers, and digital cameras. Addressable markets are projected to grow from $2 billion to $4 billion in the next three years. The transition to digital and HD in Europe and emerging markets is a big opportunity. Zoran's frame rate conversion technology for high end TV's is industry-first and there is a good possibility Samsung may become a customer. ZRAN did $1.30 in earnings in 2007 and if the company gets back to $500 million in revenues, there is no reason it can't regain profitability shown three years ago. The company has no debt. $8/share in cash limits the downside. The upside is $20, based on cash and $1.00 EPS in 2011.