The 10-second takeaway
For the quarter ended March 31 (Q1), Cavium met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share grew significantly. GAAP loss per share shrank.
Margins grew across the board.
Cavium booked revenue of $69.5 million. The 20 analysts polled by S&P Capital IQ foresaw sales of $69.3 million on the same basis. GAAP reported sales were 32% higher than the prior-year quarter's $52.7 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 $0.19. The 20 earnings estimates compiled by S&P Capital IQ predicted $0.18 per share. Non-GAAP EPS of $0.19 for Q1 were much higher than the prior-year quarter's $0.02 per share. GAAP EPS were -$0.06 for Q1 versus -$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 62.4%, much better than the prior-year quarter. Operating margin was -6.2%, much better than the prior-year quarter. Net margin was -4.6%, much better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $74.1 million. On the bottom line, the average EPS estimate is $0.22.
Next year's average estimate for revenue is $308.1 million. The average EPS estimate is $0.97.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 79 members out of 113 rating the stock outperform, and 34 members rating it underperform. Among 41 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 32 give Cavium a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cavium is outperform, with an average price target of $36.50.
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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. The Motley Fool has no position in any of the stocks mentioned. 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.