aiocf revenue growth

All;

According to its latest CC transcript, the Agivilon pans to $500 million.
Here is a quote from the transcript.

We also identified sale personal in that and so indirectly generate top line growth but it could be misleading to try and simply plot headcount to revenue growth, its not quite that liner. It’s in the hundreds and growing. I think of we stay focused on really the objective of getting to 500 million in run rate by 2016. (empahsis mine) What I can tell you is our hiring and our execution on that target is very, very good. So we are very confident of achieving that objective.

Now I got 2 questions.

  1. When he says “by 2016” does he mean by the beginning of 2016 (end of 2015) or by the end of 2016? That is a 4 quarter difference.

  2. When he says “500 million in run rate” does it mean they achieve the goal when and if one quarter revenue hits 125 million, even if the ttm revenue is less than 500 million?

For the last several quarters, they have grown ttm revenue at least 13% each quarter. If they could grow by 14%, they would hit ttm 500m revenue by 12/2015. If they grow by 8.2%, they would hit ttm 500m revenue by 12/2016. It is quite doable based on their past performance and with aggressive investment, IMO.

-M

1) When he says “by 2016” does he mean by the beginning of 2016 (end of 2015) or by the end of 2016? That is a 4 quarter difference.

I think their goal since their IPO was to reach $500M in sales for their FY2016.

2) When he says “500 million in run rate” does it mean they achieve the goal when and if one quarter revenue hits 125 million, even if the ttm revenue is less than 500 million?

I think they mean their run rate hits $500M so the first quarter they hit $125M would achieve that. I think the CEO said on the earnings call that he believes they can achieve the goal early. I question at what cost. The are hiring like mad to achieve that $500M goal. As I wrote in my post from this morning, I think this means that their y/y earnings will not look good for Q3 and Q4 2014. I think this also means their their 2015 Q3 and Q4 and possibly Q2 EPS growth numbers may look really, really good compared to the 2014. That’s why I speculate that buying the shares in the Spring might prove to get a good time.

For the last several quarters, they have grown ttm revenue at least 13% each quarter. If they could grow by 14%, they would hit ttm 500m revenue by 12/2015. If they grow by 8.2%, they would hit ttm 500m revenue by 12/2016. It is quite doable based on their past performance and with aggressive investment, IMO.

They are aggressively staffing up to achieve this goal. I think it’s highly likely that the will hit it during their FY 2015. As I said I think the market may continue to punish the stock after their next 2 earnings call but then highly reward it after the Q2, Q3, and/or Q4 2015 earnings calls…that is assuming that aggressively investing in expenses related in future growth is tapered.

Chris

They are aggressively staffing up to achieve this goal. I think it’s highly likely that the will hit it during their FY 2015. As I said I think the market may continue to punish the stock after their next 2 earnings call but then highly reward it after the Q2, Q3, and/or Q4 2015 earnings calls…that is assuming that aggressively investing in expenses related in future growth is tapered.

I think the stock is down due to

  1. currency risk.
  2. heavy spending that pressures net margin.

Currency risk is always there if you do a lot of business overseas.
But heavy spending to expend business is a long-term positive. Yes there will be execution risk. But they have a fairly good track record. They saw a sizable market opportunity as customers are migrating from analog systems to digital systems. So they want to take this window of opportunity and grab market shares. Once the migration window is closed, it would be so much more difficult trying to sell a system to someone who has just adopted your competitor’s digital system as a replacement of their analog system.

I will free up some cash and get more shares.

I see your analysis and the stock may not move for 2 or 3 quarters. But I am a very poor market timer. Most of the time when I buy something, it goes down almost immediately and when I sell something, it goes up almost immediately.

Regards.
-M

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I am a very poor market timer. Most of the time when I buy something, it goes down almost immediately and when I sell something, it goes up almost immediately.

M,

no big deal – that is practically the definition of a value investor. Where is it three years later, though? That is what counts.

Long T

just to be clear, I do not own AT&T stock . . . .

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