A few days ago, JNPR reported not so great earning and gave a soft Q3 outlook. Today AFOP reported not so good earning and gave a soft q3 outlook. And in Q1 MTZ reported soft spending on the part of its telecom customers in wireline network buildout. Do all these make a trend? Are we seeing a network capacity spending down cycle or is it just temporary, its just a blip in the up trend?
In CC transcript, Perter Chang said While telecom demand continued increasing the next growth cycle of fiber optic industry is emerging and we are excited with the finished prospects in the remaining 2014 and the coming years.
I am not sure what he meant by “finished prospects”, but it did sound like he is seeing the up cycle just emerging, though this does not jive with the earning picture of AFOP, JNPR and MTZ.
Also, I believe UBNT is operating in an entirely different business segment – wireless whereas AFOP or JNPR are in wireline segment.
Those with network knowledge please shed some lights here.
AFOP’s earnings don’t look that bad to justify the selloff today. Essentially they have doubled revenue and are trading at the same price as a year ago. The P/E is very small. I haven’t done a comparison with adjusted earnings but it looks around 12. Even another flat quarter more than justifies the price right now.
IT SURE IT LOOKS, BY THE WAY THE PRICE KEEPS DROPPING, THAT EVERYONE IS ABANDONING THE SHIP. AS OF THIS MORNING I’M DOWN 33% AND COUNTING. I WILL PROBABLY RIDE TODAY OUT AND REACT BY THE END OF THE WEEK TO SEE WHAT MR MARKET IS GOING TO DO. THE EARNINGS REPORT WASN’T THAT BAD WAS IT?
IT SURE IT LOOKS, BY THE WAY THE PRICE KEEPS DROPPING, THAT EVERYONE IS ABANDONING THE SHIP. AS OF THIS MORNING I’M DOWN 33% AND COUNTING. I WILL PROBABLY RIDE TODAY OUT AND REACT BY THE END OF THE WEEK TO SEE WHAT MR MARKET IS GOING TO DO. THE EARNINGS REPORT WASN’T THAT BAD WAS IT?
This is a micro cap; expect plenty of volatility with price movement. I did not read or listen to the conference call as yet, but based on the earning numbers, the PE is less than 11!! This is a young company that has lots of room to grow and they are working on this. Expect some lumpiness as it grows. TTM revenue and eps were still growing, albeit slower than before, but I’m willing to wait few more quarters to see what happen next. In the mean while, I added 1% at 13.40 and may add after reading the conference call.
I’ve a 9.8 PE based on 1.36 eps (2Q earnings annualized).
The market seems to be pricing in declining revenues and earnings. At current price levels the earnings would need to drop by ~30% for the PE to reach 15.
I’ll have to read the conference call this weekend but am interested to hear if anyone is in the industry and if purchasers are changing their overall allocation mix between hard wiring vs wireless and overall CapEx spending.
I agree, LegoAbs. I had been reducing slightly before the earnings, but I bought back some at $13.33. I also think that the price (11 times earnings) is ridiculous for a company that has $1.33 in trailing earnings, which is up more than 100% from trailing earnings of 61 cents a year ago. And revenue of $24.2 million which is more than double what it was two years ago ($11.5 million).
I think why it sold off so much is that they were too enthusiastic in their quarterly revenue predictions of “above $25 million” (with no upper limit). That probably has caused some loss of faith in their predictions, but Geez, at $13 and change, it seems a bargain.
THANKS GUYS. I NEDDED THAT. WHAT WITH SO MANY OF MY HOLDING’S SHOWING GOOD EARNINGS AND GOING DOWN MORE I GET JUMPY. HANG ON AND MAYBY ADD A LITTLE. MAKES SENSE.
I think why it sold off so much is that they were too enthusiastic in their quarterly revenue predictions of “above $25 million” (with no upper limit). That probably has caused some loss of faith in their predictions, but Geez, at $13 and change, it seems a bargain.
Hola,
I think the micro caps are also a bit discriminated against re: overall market sentiment, due to such a long run with no decent pullback. So probably some rotation influence going on.
I checked with my technical crystal ball and I see…more downside.
Once it hits below $13, I’ll take a look at selling some puts since I really don’t think AFOP deserves that low valuation but I too have been looking for which stocks will be hurt most in a downturn and have been rotating out to cash or larger caps with solid fundamentals and AFOP has just got hit early.
Here is AFOP guidance
Now let me talk about the forward guidance. Although, we are optimistic with the recent demand from our number one customers based on current backlog and the sum of build on euro,we expect the sales in the current quarter to be in a similar level as last quarter.
We expect gross margin and effective tax rate will remain in the similar level. With quarterly sales about $23 million for three quarter in a row, we are optimistic of delivering record annual sales and annual operating profit in 2014 from our 2013 record level.
Here are their last 3 quarters
Rev / EPS
24.8 / .35
24.2 / .34
24.2 / .35
Next quarter is about the same? $24 (I hope it’s not $23 as stated in conference call)
24 / .35
Growth in TTM revenue will be 20%. Seems like the only place where there is growth, so AFOP had to highlight that! Base on next quarter projection, they are stuck in neutral for a full year now - hence the selloff. But with P/E at 9.71, this may be a bargain.
