Starent Networks Corp.

Starent Networks Corp. (STAR) shares are trading above a key level after a strong full-year announcement.

Company Description

Starent Networks, Corporation is a leading provider of infrastructure solutions that enable mobile operators to deliver multimedia services to their subscribers. The company has created solutions that provide network functions and services.

Starent's products integrate multiple network functions and services needed for the delivery of advanced multimedia services, such as video, Internet access, voice-over-IP, e-mail, mobile TV, photo sharing and gaming.

Beat the Street by 50%

Revenues rose 40% in the fourth quarter to nearly $71 million when the company reported its year-end results on Jan 8. Full-year revenues were over $254 million, a 74% bump from 2007.

Earnings per share were 24 cents, 50% above the consensus of 16 cents, and 4 times the same period in 2007. Net income for the full year was almost $61 million, up from just $11.5 million for all of last year.

Estimates Climbing

Not surprisingly, analysts have increased their forecasts for the current and next year. One month ago the consensus for 2009 was 46 cents and the 2010 average was 54 cents. Those figures are now 50 cents and 62 cents respectively.

While there is a pull back in growth for 2009, the current projections are calling for a 24% growth in 2010.

Top of the Industry

Starent is currently the top rated telecom equipment company, beating out 60 of its peers. It is no surprise when looking at some of its fundamentals. Starent's net profit margin is 23.8%, dominating the industry average of 0.5%.

The company's return on equity is 17.8%, well above the 4.8% other telecom equipment companies are bringing in. Starent is also carrying no debt while its peers average a debt to equity ratio of 1.5.

The Chart

Shares of STAR have been on a strong run over the past couple months. They have broken through a key resistance level near $14 per share and now using that level as support. Take a look at the chart below.

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