Connected intelligence company CalAmp Corp.’s (CAMP) President Jeffery Gardner shelled out $139.3 thousand since June 28 to buy 30 thousand shares of the company. Moreover, insider Cummins Wes bought 225 thousand shares of the company. This indicates the confidence of insiders in the company’s prospects.
However, the stock has lost 39.3% over the past month to close the last trading session at $4.20. Analysts expect its EPS and revenue to decline 212.5% and 5.3% year-over-year, respectively, in fiscal 2023. Moreover, the company’s trailing-12-month ROCE, ROTC, and ROTA are negative compared to the industry averages of 7.16%, 4.53%, and 2.99%, respectively.
CAMP’s revenue decreased 18.8% year-over-year to $64.73 million for the fiscal first quarter ended May 31, 2022. The company’s adjusted net loss for the quarter came in at $3.41 million compared to an income of $2.95 million in the prior-year period.
Its adjusted loss per share also came in at $0.10 compared to $0.08 in the year-ago period. Given its weak financials and growth prospects, CAMP looks significantly overvalued at the current price level. Its forward EV/EBIT of 55.80x is 279.8% higher than the industry average of 14.69x. So, it’s wise to avoid the stock now.
However, networking solutions are in high demand due to the continuation of hybrid working trends and the rising penetration of the internet of things (IoT) worldwide. Moreover, the growing need for businesses to go digital to remain competitive is expected to increase the demand for agile networks, driving the network industry's growth.
According to a report by Markets and Markets, the global network-as-a-service (NaaS) market is expected to grow at a CAGR of 29.4% by 2026.
So, instead of betting on CAMP, it could be wise to invest in networking solutions stocks Extreme Networks, Inc. (EXTR) and AudioCodes Ltd. (AUDC), which are well-positioned to capitalize on the industry tailwinds.
Extreme Networks, Inc. (EXTR)
EXTR provides software-driven networking solutions worldwide. The company designs, develops, and manufactures wired and wireless network infrastructure equipment; and develops software for network management, policy, analytics, security, and access controls. It markets and sells its products through distributors, resellers, and field sales organizations.
On June 7, 2022, EXTR introduced a suite of new solutions, creating new ways for customers to drive better outcomes from their networks in the era of the Infinite Enterprise. Nabil Bukhari, Chief Technology Officer, and Chief Product Officer, EXTR, said, “We’ve layered features into our cloud solution that will drive meaningful business impact and ROI by simplifying operations, removing complexity and reducing risk."
EXTR’s revenues increased 13% year-over-year to $285.50 million for the fiscal third quarter that ended March 31, 2022. The company’s non-GAAP net income came in at $27.40 million, representing a 33% year-over-year increase. Also, its non-GAAP EPS came in at $0.21, up 31% year-over-year.
Analysts expect EXTR’s EPS and revenue to increase 35.1% and 9.3% year-over-year to $0.77 and $1.10 billion, respectively, in fiscal 2022. It surpassed Street EPS estimates in three of the trailing four quarters.
EXTR’s POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock has a B grade for Growth, Value, and Quality. Within the Technology - Communication/Networking industry, EXTR is ranked #1 out of 54 stocks. Click here to see the additional POWR Ratings for EXTR (Sentiment, Momentum, and Stability).
AudioCodes Ltd. (AUDC)
AUDC provides advanced communications software, products, and productivity solutions for the digital workplace. The company offers solutions, products, and services for unified communications, contact centers, VoiceAI business lines, and service provider businesses. The company primarily operates in the Americas, Europe, the Far East, and Israel.
On May 2, 2022, Shabtai Adlersberg, President and CEO of AUDC, said, “We are now confident that we are well on track to grow our conversational AI business more than 50% in 2022. Following our success in the Israeli market with IVA applications, we have plans to start addressing the global market in the second half of 2022.”
AUDC’s revenues increased 12.8% year-over-year to $66.40 million for the fiscal first quarter that ended March 31, 2022. The company’s total liabilities came in at $133.31 million for the period ended March 31, 2022, compared to $143.87 million for the period ended December 31, 2021. Also, its gross profit came in at $44.36 million, up 10.2% year-over-year.
For fiscal 2023, analysts expect AUDC’s EPS and revenue to increase 21.6% and 12.7% year-over-year to $1.80 and $316.73 million, respectively.
It is no surprise that AUDC has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. The stock has an A grade for Quality and a B for Stability and Sentiment.
Click here to see AUDC’s Growth, Momentum, and Value ratings. AUDC is ranked #2 in the Technology - Communication/Networking industry.
CAMP shares fell $0.16 (-3.67%) in after-hours trading Thursday. Year-to-date, CAMP has declined -38.24%, versus a -17.49% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
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