Atheros Communications, Inc. (ATHR) analysts can not raise estimates fast enough following the recent quarterly report. Despite missing estimates last quarter, growth projections are in the double digits for the next few years.

Company Description

Atheros makes wireless and wired communication devices. The company’s semiconductors are used in PCs, network equipment and consumer products.

Revenue Up 89%

On Jan 25 Atheros reported quarterly results that showed an 89% year over year increase in revenues, to $188 million. The company bolstered its balance sheet Incorporatedrease cash and cash equivalents to more than $400 million, up from just $109 million last year.

Atheros did miss earnings expectations, posting a 32 cent per share profit which missed the consensus estimate by 8 cents. However, estimates are surging after the report.

Estimates Spike

Over the past 30 days we have received 18 estimate revisions for full-year 2010. All the revisions were raised, making the Zacks Consensus Estimate $1.53, up from $1.20.

Forecasts for 2011 are averaging $1.73, up from $1.29 over the past month. Compared to earnings in 2009 of 93 cents per share and you have growth rates of 64% and 13%, respectively.

Aqcuisition Completed

On Dec 15 Atheros finished its acquisition of Intellon, which specialized in power line communications including broadband access, networked entertainment and other technologies. The deal was for a combination of stock and cash and stock.

Valuations

Those growth rates mentioned earlier are coming at a solid value as the PEG ratio is about 0.85 times. Shares are trading at roughly 15 times 2011 earnings.

The Chart

While shares of ATHR have surged over the past year, below you can see that the annual estimates have grown even faster. Recent pressure in the tech sector has weighed on Atheros, which could represent a great buying opportunity.

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service

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