Wednesday morning, we're getting a quarterly and annual financial update from digital cinema pioneer Access Integrated Technologies
What analysts say:
- Buy, sell, or waffle? Only four analyst firms cover this micro-cap operation, but they all want to buy it. Our own Motley Fool CAPS community isn't as impressed, though. On CAPS, it's a one-star stock today -- our lowest rating -- based on input from 31 players.
- Revenue. $14.5 million for the quarter would satisfy the Wall Street consensus estimate. That's far and away better than the $4.5 million of sales recorded in the year-ago period.
- Earnings. The analysts expect a loss of $0.24 per share, wider than the $0.17 per-share loss last year.
What management says:
In the latest earnings report, CEO Bud Mayo said that he wants to keep revenue growing not only year over year but also quarter by quarter. The idea is that annual growth is doing great already, so it makes sense to shift to predictably rapid growth on a shorter time scale.
What management does:
I can't blame Bud for his breathless enthusiasm. Margins are improving, the bottom line is closing in on profitability (though that will still have to wait another handful of periods), and geez, did you see the revenue growth trend? Something is clearly working here.
|
9/2005 |
12/2005 |
3/2006 |
6/2006 |
9/2006 |
12/2006 |
|
|---|---|---|---|---|---|---|
|
Gross |
37.8% |
36.3% |
31.2% |
33.5% |
43.7% |
50.5% |
|
Operating |
(67.1%) |
(74.2%) |
(54.9%) |
(52.7%) |
(36.8%) |
(28.4%) |
|
Net |
(145.8%) |
(152.3%) |
(100.1%) |
(91.6%) |
(54.9%) |
(50.9%) |
|
Growth (Y-O-Y) |
9/2005 |
12/2005 |
3/2006 |
6/2006 |
9/2006 |
12/2006 |
|---|---|---|---|---|---|---|
|
Revenue |
24.1% |
15.1% |
57.7% |
48.3% |
127.8% |
219.6% |
One Fool says:
AccessIT is a leader in its field, despite the small size. The company has first-mover advantage on digital projection, distribution, and management systems to cinema-scale screens, although there are a few competitors these days in the likes of Thomson SA
The cinema chains are jumping aboard the digital bandwagon en masse now, setting up plans for all-digital rollouts over the next few years. The film reel is destined for obsolescence in a decade or so at this pace, as today's and tomorrow's high-speed data networks can do the same job faster, with better access controls and guaranteed image quality even after hundreds of viewings. Adieu, film speckles.
So, this is an established technology leader at the start of a massive sea change. And don't forget that AccessIT is more than just the digital projection equipment -- revenue will flow for many years from the service contracts and distribution services attached to the hardware.
As for this quarter, anything but torrid growth will look like a failure, and the stock price may sink even on a very impressive set of numbers. Such is the life of the small tech start-up, and it's a concept familiar to both our Motley Fool Hidden Gems and Motley Fool Rule Breakers subscribers. In other words, don't panic. One little quarter isn't the whole story, whether good or bad.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure will help you find the road ahead.
