DA Davidson analyst Mark Kelleher lowered his price target on Macom to $32, citing a Q1 earnings miss and a compression in gross margins. Kelleher notes that the pressure came from "a market transition from LR4 transceivers to shorter-range CWDM" that "drove pricing of LR4 down significantly". The analyst keeps his Buy rating on Macom however, saying that while the impact of that transition will also be felt in Q2, longer term the ramp of higher-margin Laser/Photonic Integrated Circuit sales should pull gross margins back up towards the company's target of 60%.