The 10-second takeaway
For the quarter ended May 31 (Q1), DragonWave beat expectations on revenue and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP loss per share improved.
Gross margin shrank, operating margin improved, and net margin dropped.
DragonWave reported revenue of $12.8 million. The eight analysts polled by S&P Capital IQ expected sales of $12.0 million on the same basis. GAAP reported sales were 17% higher than the prior-year quarter's $11.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at -$0.34. The seven earnings estimates compiled by S&P Capital IQ predicted -$0.27 per share. GAAP EPS were -$0.35 for Q1 compared to -$0.28 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 31.9%, 1,010 basis points worse than the prior-year quarter. Operating margin was -75.0%, 1,460 basis points better than the prior-year quarter. Net margin was -97.0%, 750 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $49.2 million. On the bottom line, the average EPS estimate is -$0.26.
Next year's average estimate for revenue is $174.9 million. The average EPS estimate is -$0.68.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 255 members out of 268 rating the stock outperform, and 13 members rating it underperform. Among 43 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 38 give DragonWave a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on DragonWave is hold, with an average price target of $3.68.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.