Shares of Ubiquiti Networks (NASDAQ:UBNT) stock entered the week down just over 22% to date in 2014. Will the slide continue, or are better days ahead? A lot depends on how well the business performs. Here's a look at what analysts expect to see when the communications technology specialist reports fiscal first-quarter earnings on Thursday night:

3Q Estimates
Revenue
YoY Growth
EPS
YoY Growth

Low estimate

$156 million

20.3%

$0.49

22.5%

High estimate

$160.77 million

23.9%

$0.54

35%

S&P CAPITAL IQ CONSENSUS

$158.78 million

22.4%

$0.53

32.5%

Source: S&P Capital IQ.

Cost controls and improving margins are to be expected, but investments to produce more products in a shorter time frame could be key in the long term.

Earnings History
Q3 2013
Q4 2013
Q1 2014
Q2 2014

Consensus

$0.46

$0.48

$0.50

$0.56

Actual

$0.40

$0.45

$0.49

$0.51

DIFFERENCE

$0.06

$0.03

$0.01

$0.05

Source: S&P Capital IQ.

Looking at the overall business, I'm watching for momentum in each of these three areas:

1. Continued margin gains
Cost controls are key to the Ubiquiti Networks story. And it's a good one: net margins tend to be much better than those of competitors. For example, last quarter, Ubiquiti took home 31.7% of revenue as earnings from continuing operations. Peer Ruckus Wireless (NYSE:RKUS) earned just 1.8% on the same basis. I'll be looking to see if new products are adding to Ubiquiti's margin advantage, or if strategic investments to seed the market took a toll. The former is preferable for obvious reasons, but also because Ubiquiti claims to have a vibrant user community that eliminates the need for hefty marketing expenses.

2. Much better than expected revenue growth
In fiscal 2014, the first quarter was a watershed moment for Ubiquiti as revenue more than doubled, according to data supplied by S&P Capital IQ. We shouldn't expect the same this quarter, and the consensus estimate for 22% growth could come off as disappointing in light of not only last year's double but also an 85% bump in last year's fiscal second quarter, a 78% gain in the third quarter, and a 54% jump in the fourth quarter.

3. New products and an update on the leased manufacturing space
Ubiquiti rolled out a variety of new products last quarter, including the UniFi Video surveillance system, the EdgeSwitch Internetworking device, and UniFi VoIP for connecting enterprises via voice service over the Internet. Yet even more are coming. A manufacturing space leased in the fourth quarter includes a dedicated "prototyping line" for bringing new products to market faster. I'll be looking for specifics in the earnings call.

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned no shares of mentioned companies at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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