Why Ubiquiti Networks Shares Soared
Nov 8th 2013 9:48AM
Updated Nov 8th 2013 9:52AM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of communications networking technologist Ubiquiti Networks jumped 18% today after its quarterly results and outlook topped Wall Street expectations.
So what: The stock has soared in 2013 on better-than-expected growth, and today's Q4 results -- income spiked 208% on a revenue jump of 111% -- coupled with upbeat guidance suggest that the momentum isn't slowing. In fact, Ubiquiti's operating margins jumped to 35.4% from 25.6% in the year-ago period, suggesting that its competitive position is strengthening as well.
Now what: Management now sees Q1 EPS of $0.40-$0.44 on revenue of $130 million-$136 million, versus Wall Street's view of $0.40 and $123.77 million. "Ubiquiti is continuing to demonstrate the financial leverage, scalability and disruptive power of our business model," Founder and CEO Robert Pera said. "With our strong pipeline of innovative products, growing traction in the enterprise business and improving execution we believe that we are well positioned for future growth." Of course, with Ubiquiti shares flirting with their 52-week highs once again and trading at a price-to-cash flow around 30, much of that growth might already be baked into the valuation.
Apple's newest iPad Mini with Retina display might be hard to come by this quarter, given all the reports of supply constraints. Well, we're going to be sure to get a few -- and give them away! That's right: For the first time ever, The Motley Fool is hosting a contest where you can win a free iPad Mini with Retina display. All you have to do is tell us why you love The Motley Fool by clicking here! We'll pick the three most Foolish submissions to receive a free iPad Mini with Retina display.
See full terms and conditions by clicking here.
The article Why Ubiquiti Networks Shares Soared originally appeared on Fool.com.Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. 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.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.