EXFO Q1 Earnings: Can EXFO Hit Its $0.03 EPS Target?

in EARNINGS/INVESTING IDEAS by

EXFO Inc. (NASDAQGS:EXFO) is scheduled to report Q1 earnings results on January 7, 2020. The quarterly conference call is scheduled for the same day at 5:00 PM ET.

The company is expected to report earnings of $0.03/share on revenue of $72.561 million. The consensus earnings per share (EPS) of $0.03/share is based on a poll of 6 analysts and represents growth over the same quarter last year when the company reported earnings of -$0.02/share.

The revenue forecast of $72.561 million based on a poll of 6 analysts implies a year-over-year (YoY) growth of 4.9%. Last year the company reported $69.201 million in revenue for the quarter.

Expected to report EPS of $0.03/share for Q1, 2019
Metric Expected Prior Year YoY Change
Revenue $72.56 $69.20 4.9%
EPS $0.03 -$0.02 NM

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, and missed expectations 4 quarters.

What are your expectations from EXFO for earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q4, 2019 $0.04 $0.05 36.1% Beat
Q3, 2019 $0.04 $0.04 -6.7% Missed
Q2, 2019 $0.06 $0.16 190.2% Beat
Q1, 2019 -$0.05 -$0.02 NM Beat
Q4, 2018 $0.07 $0.05 -32.6% Missed
Q3, 2018 -$0.06 -$0.01 NM Beat
Q2, 2018 $0.04 $0.02 -55.5% Missed
Q1, 2018 $0.05 $0.05 -0.8% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-10-09 $3.68 $3.78 2.7% Increase
2019-07-10 $3.94 $3.55 -9.9% Decline
2019-04-02 $3.69 $4.04 9.5% Increase
2019-01-08 $3 $3.23 7.7% Increase

After the last earnings report for the period ending August 31, 2019, the stock price increased by 2.7%.

Fundamentals And Technical Analysis

EXFO is currently trading at $4.83/share, up 0.2% for the day. The company is trading at approximately 97.2% of its 52-week high of $4.97/share. The company’s stock price is up 27.8% since the last earnings report and up 4.5% over the previous week. The current share price implies a price-to-earnings (P/E) multiple of -107.9x and a forward P/E multiple of 17.0x.

The company’s 14 Day Relative Price Index (RSI) of 67.35 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

EXFO’s current share price also implies a price-to-book (P/B) multiple of 1.6x. The following table summarizes some other key fundamental ratios:

Data as of January 6, 2020
Metric Value
Last Fiscal Period FY2019.Q4
Period End Date August 31, 2019
Stock Price (Current) $4.83
P/E Ratio -107.9x
P/E Ratio (Fwd) 17.0x
PEG Ratio 0.8
Total Debt to Capital (%) 3.9%
Levered Free Cash Flow $9.744 million
Enterprise Value / EBITDA 12.4x

Source: Finbox

Company Profile: EXFO Inc.

EXFO Inc. is a micro-cap stock with a market capitalization of $268.7 million and a total enterprise value of $259.7 million. The company operates in the Information Technology sector and Communications Equipment industry.

EXFO provides test, monitoring and analytics solutions for fixed and mobile communications service providers, web-scale operators, and network equipment. It offers field network testing products, such as copper/DSL testing, dispersion analysis, fiber inspection, light sources, live fiber detection, network protocol testing, optical fiber multimeter, optical loss testing, optical time-domain reflectometry and iOLM, power meters, spectral testing, test function virtualization, and test reporting and automation products, as well as modular test platforms.

The company also provides lab and manufacturing testing network protocol testing products, network simulation and load testing products, optical benchtop kits, optical communication analyzers, optical light sources, optical power meters, optical spectrum analyzers, switch and utility modules, test platforms, variable attenuators, tunable filters, optical component testers, and tunable sources; and service assurance products, such as fiber monitoring, network probe, network topology management, monitoring, and troubleshooting, RAN optimization, and real-time analytics.

In addition, it offers mobile portfolio that consists of network simulators and optical radio frequency test solutions for turning up and troubleshooting fiber-based mobile networks; PC-centric and open-ended platforms with cloud-based software applications; and Internet protocol assurance services, as well as monitoring services for 2G, 3G, 4G/LTE, and 5G mobile networks.

The company sells products through its direct sales force, sales representatives, and distributors in the Americas, Europe, the Middle-East, Africa, and the Asia-Pacific. EXFO Inc. was founded in 1985 and is headquartered in Qu├ębec City, Canada.

 

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