Pachter: Majesco Nearing Profitability Boiling Point

With Majesco set to report its Q3 results on September 11th, Wedbush Morgan's Michael Pachter says Cooking Mama and a diverse holiday lineup are bringing the company closer than ever to reaching profitability. Though the company did not provide any Q3 guidance, Pachter believes sales should be in line with estimates at $10 million, slightly above Wedbush's own, on the continued strength of the Cooking Mama franchise. Pachter notes that while his own estimates called for a Q3 sales drop of some 20%, the latest NPD sales report shows Majesco's products actually up 4% from the year prior. Said Pachter, "We note that Majesco’s remaining FY:07 lineup of budget titles, including 6 DS, 1 Wii, and 1 Xbox 360 game, should provide relatively modest revenue at a modest cost," adding that "though we think Majesco may continue to struggle with its low cash levels, we believe that the company is close to returning to profitability, due to improvements in its sales and cost management." "We are increasingly positive on the story," he concluded, "now that the company has been able to stabilize revenues in the $12 – 13 million quarterly range, and believe that Majesco can be slightly profitable at $65 million in annual revenues."