No Good Bad Stock

Acia (Acacia Communications)

Well this was a terrible quarter for Acacia. Its Revenue was up 107.7 % YoY. From 68.5m to 142.4m. Its Full Year Revenue Increased by a measly 100% from 239.1M to 478.4M, but that isn't what was really terrible. It was their Non-Gaap EPS. It was up only 161 % from $.36 to $.94. This was just a terrible quarter and a terrible year for this company and it is completely understandable why it sold off 14.8%.

Well the quarter was a huge quarter and a beat on the top and bottom line. So why the sell off? Well they sell into China and one of their big customers is ZTE and they are fighting the U.S trying to stay off the list for selling equipment to Iran. ZTE has been extending it month to month trying to clear their problem. Also the company gave guidance that was weak for next quarter. They expect one of their biggest customer to sell less product next quarter. The customer sells product into the data centers. This is one of their biggest areas that they sell into. Also they expect the Telco division to be weak. Now this doesn’t make sense to me because the Telco’s are buying like crazy at the start of the year. But that is what they said on the conference call. So for the weak guidance they sold off. Now lets see just how weak the guidance is. They expect total Revenue to be between $108 million and $114 million representing a yoy growth of 28% to 35%. Ok that is a lot lower than this year so I can understand someone getting jumpy. Also they expect EPS in a range of $.63- $.70 per share. This is against $.44 per share in Q1 2016 which is YoY growth of 43% to 59%. The Analysts had hoped for 137.36M and EPS $.63 to $.70. Ok that all makes sense now when the stock is selling for a P/E of 17. Oh Yea the company only gives guidance one quarter ahead but they expect 2017 to be another banner year.

Long ACIA (Everyone sell your shares, its a terrible company)


Well this was a terrible quarter for Acacia. Its Revenue was up 107.7 % YoY.

hi Andy, thanks for the write-up on Acacia. I know nothing about it but will take a look.


Thanks Saul I will be interested in your viewpoint. They make SFP’s and CFP modules for companies that make Transport equipment. I moved my investment out of INFN into this company because I still believe in the big data build out. The reason why I like them more is because they have customers in China so they can capture some of that market also. I believe Bert had a write up on them when they were much higher. I got into them recently because of their growth. They are a rather new IPO though. Another plus is they sell their modules to different companies so they are not locked into one single customer and with the white boxes that are being built in the data center I am hoping they will have, or already have facebook as a customer.


One more thing Saul. The company doesn’t have any debt and they have grown their cash in the last year from 27 million to 206 million and they are FCF positive and growing .


1 Like