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Why CalAmp Stock Popped 16.1% in April

By Steve Symington – May 9, 2019 at 9:00AM

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The M2M leader is building its recurring revenue base. Here's what investors need to know.

What happened

Shares of CalAmp (CAMP 3.36%) jumped 16.1% in April, according to data from S&P Global Market Intelligence, as the machine-to-machine communications specialist highlighted a number of intriguing acquisitions leading up to its first-quarter 2019 report.

In particular, on April 15, when CalAmp revealed its $50 million purchase of bus fleet safety and management leader Synovia Solutions -- and keeping in mind its separate recent acquisitions of LoJack Mexico, Tracker Network, and Car Track -- the company noted the move will bolster its recurring software-as-a-service (SaaS) revenue to more than $30 million by the second half of this year.

Dark blue stock chart indicating gains


So what

To be clear, it likely helped that CalAmp stock was hovering near its 52-week low at the end of March. And CalAmp's rise was fairly steady in the weeks leading up to its Q1 report on the final day of April. Shares declined modestly after that report was mixed relative to expectations; management blamed lower-than-expected revenue on a combination of declines in telematics hardware sales and "lingering supply chain challenges" as it moves away from Chinese partners to mitigate the impact of tariffs.

Now what

Still, CalAmp's rise last month has only been partially offset by its drop so far in May. This indicates investors are still optimistic that CalAmp can drive profitable longer-term growth as it not only resolves its supply chain issues but also leans on recurring software and subscription services revenue gains. 

Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends CalAmp. The Motley Fool has a disclosure policy.

Stocks Mentioned

CalAmp Stock Quote
$3.38 (3.36%) $0.11

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