Alvarion Signs Another Big Contract

This time they've one a deal in Italy. Aria owns a nationwide network so this is likely one of the $20M+ deals that ALVR management continuously discuss. ALVR continues to remain a very cheap stock especially now that they've announced 2 major contracts.

• Aria currently holds nationwide WiMAX licenses at the 3.5 GHz frequency bands in Italy. By using Alvarion’s Open WiMAX solution, Aria will be able to build a state of the art network with exceptional coverage to meet the growing demand for broadband services in the country.

Analyst from CL King provides his view. While we agree the deal is likely worth more then $20M, we don't agree in how the analyst only comes to a target price of $5. Its easily worth $5 now with a target price more in the range of $10.

• The order is from Aria SPA, an Italian wireless Internet service provider. Financial details were not disclosed. However, Lawrence M. Harris, an analyst with CL King & Associates, said in a note to investors the value of the deal is more than $20 million over the next two to three years.
• "The Aria announcement does not change our near-term forecast for Alvarion, but adds to our confidence in the company's outlook," wrote the analyst, who rates Alvarion "accumulate" with a target price of $5.
• Harris said he expects a profit of 2 cents per share for 2009. He said the Aria deal represents "the second major contract reported by Alvarion in the past week."