BigBand shares jump on analyst upgrade

BigBand Networks Inc. shares jumped 23 percent Thursday after an analyst upgraded the stock, saying demand for its products that make it easier to transmit large video files is likely to increase from broadband service providers.

BigBand shares added 70 cents, or 23.3 percent, to close at $3.70. The stock has ranged from $2.76 to $9.70 in the past 12 months.

AvondalePartners analyst Blair King slapped an "Outperform" rating on the company, which makes switched digital video hardware and software. The products send digital video in a manner that requires less capacity on a broadband cable, freeing up space for larger videos or other applications.

BigBand "continues to benefit as carriers expand network capacity in support of bandwidth intensive applications like high-definition television," King wrote in a note to investors.

He said the company has strong potential for growth given its leading market share in the niche. He also likes that it has no debt on its balance sheet and a solid amount of cash on hand.

"We believe BigBand's valuation represents a low cost option on digital video broadcast," King said.

Cable companies are increasingly spending money to expand their ability to send as much high-quality video as possible for both cable television and the Internet.

"Given bandwidth limitations in most cable systems today, broadband service providers will ultimately turn to an SDV architecture," the analyst said.

Jefferies & Co. analyst George Notter said BigBand claimed in a recent presentation that it has 55 percent of the market for SDV applications. He rates the stock "Hold."