Kirk,
Revenue of $15.9M
Assume 20% growth next Q then three Q's of 10%
19.08, 20.99, 23.09, 25.40
Give them ONLY a 10% net margin (they said 15% in 9 months is possible)
2.54M
24.8M shares
.10/share
get a quarterly earnings
multiply by 4 for a yr
.40/share
give it a p/e of 20
what does that give?
8.0
Then discount it for 20% growth (nobody can grow at 50% for long) for a PEG of 2 (multiply by 2)
What do you get?
$16
I think that is fair value TODAY.
upside is 15% margin and more growth for larger PEG.
Looking at price/sales versus competitors says the same thing.
CACS 3.37 versus ADTN 7.15 and AFCI 6.63. Assuming a solid return to profitability, a double is not unreasonable, and then 50% more assuming forward numbers instead of ttm (the Yahoo stats are trailing at least 30% low already!). That's about $16, too.
There is no way this stock will grow 20% per quarter though. It will either flatten to match the market it's in very quickly, because only so much new market share can be captured, or it will accelerate as new products catapult the company to new markets.
Zap
News 
Market Data 
Discover 
