Ubiquiti Networks, Inc.
) hit a new 52-week high of $47.39 during yesterday's trading
session. However, the stock closed at $46.92, reflecting a solid
year-on-year return of 279.6%. Its average trading volume for the
last three months aggregated 960,959 shares.
Ubiquiti Networks delivered positive earnings surprises in the
last four quarters with an average beat of 10.93% This Zacks Rank
#2 (Buy) stock has a market cap of $4.11 billion and long-term
earnings growth expectations of 35.5%.
Ubiquiti Networks has a strong balance sheet and generates
substantial cash flow. In the last reported quarter, the company
witnessed a surge in both top and bottom lines, driven by higher
revenues across its businesses and regions. In addition, the
company's strong performance in its Enterprise Technology segment
was one of the catalysts driving the stock.
On Nov 7, Ubiquiti Networks reported strong first-quarter
fiscal 2014 results with non-GAAP net income of $41.2 million or
46 cents per share, well exceeding the Zacks Consensus Estimate
of 39 cents. In the prior-year quarter, the company had reported
adjusted net income of $13.6 million or 15 cents per share.
Ubiquiti Networks' total revenue also surged 110.8% year over
year and 28.2% sequentially to $129.7 million. The growth was
driven by increased transaction volumes and addition of new
services for existing customers. Revenues beat the Zacks
Consensus Estimate of $113 million by 14.8%.
In addition, Ubiquiti Networks maintains a sound and flexible
balance sheet with ample liquidity that enables it to capitalize
on potential acquisition opportunities to fuel its top-line
growth. The company had around $280 million in cash & cash
equivalents and $51.9 million of operating cash flow at the end
of the last reported quarter.
Growth in the company's core business primarily drove the
earnings. Ubiquiti Networks' persistent focus on expanding
services by increasing investments in innovation and development
are some key growth drivers. Diligent execution of operational
plans by management and robust growth opportunities in the
enterprise business also contributed to the strong results.
Over the last 60 days, most of the earnings estimates for
fiscal 2014 and 2015 have been revised upward. Therefore, we
envision an uptrend for the stock backed by its strong growth
potential with estimates rising by 11.7% to $1.81 for 2014 and by
10.5% to $2.09 for 2015.
Other Stocks to Consider
Some other stocks operating in the same sector worth reckoning
Mitel Networks Corp.
). All these stocks carry Zacks Rank #2 (Buy).
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UBIQUITI NETWRK (UBNT): Free Stock Analysis
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