By
Dave Mock
|
More Articles
April 16, 2008
|
The market will get to hear the latest from Motley Fool Hidden Gems recommendation and wireless network solutions provider Ceragon Networks (Nasdaq: CRNT ) this Friday. Let's see what may become of earnings in Ceragon's first quarter.
What analysts say:
-
Buy, sell, or waffle? Of 12 analysts rating Ceragon, 10 say buy and two give it a hold rating. The company holds a top-notch five-star stock rating in the Motley Fool CAPS community, with more than 1,420 opinions given.
-
Revenue. On average, analysts predict quarterly sales to rise 36% over the same quarter last year, to $46.2 million.
-
Earnings. Profits are expected to grow even faster, to $0.13 per share.
What management says:
With a stock that's been trending downward over the past several months, many investors -- including this Fool -- have been wondering what's going on at Ceragon. But as we often emphasize here at the Fool, the stock doesn't tell you anything fundamentally about a company, which is why you shouldn't base decisions on stock movement.
Little has changed in outlook for the company as service providers such as Verizon Wireless -- a joint venture of Verizon Communications (NYSE: VZ ) and Vodafone -- and AT&T (NYSE: T ) will be driving demand for broadband backhaul solutions. In its last earnings report, Ceragon President and CEO Ira Palti noted that "the primary growth drivers for high-capacity wireless backhaul remain in place and we have a large pipeline of opportunities. We are looking forward to another year of growth in 2008."
What management does:
In the recent quarter, margins remained strong as the company kept a lean structure.
|
Margins
|
9/06
|
12/06
|
3/07
|
6/07
|
9/07
|
12/07
|
|
Gross
|
34.9%
|
25.5%
|
26.5%
|
27.4%
|
29.1%
|
36.1%
|
|
Operating
|
2.3%
|
(6.2%)
|
(3.5%)
|
(1.5%)
|
0.2%
|
7.7%
|
|
Net
|
(4.0%)
|
(5.0%)
|
(2.6%)
|
(1.1%)
|
0.4%
|
8.1%
|
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.
One Fool says:
Ceragon's growth potential is strongly tied to the broadband upgrade cycle that has telecom operators around the world boosting capacity in their networks. Uncertainty about the pace of Clearwire (Nasdaq: CLWR ) and Sprint Nextel's (NYSE: S ) WiMAX rollout has hurt Ceragon, but lackluster outlooks from other network equipment providers such as Nokia (NYSE: NOK ) and Siemens' joint venture and Alcatel-Lucent (NYSE: ALU ) have also had investors hedging on Ceragon's prospects.
But network expansion concerns are near-term in nature -- adding broadband capacity to wireless networks around the world is just a matter of when. So the long-term possibilities with Ceragon are still there if the company can position itself to capture a good portion of this business, as it has done in the past.
More Foolish insight:
RSS Headlines
Fool UK