Procera Networks (PKT - Snapshot Report)
is a Zacks #1 Rank (Strong Buy) after making a sustained move into profitability. Strong EPS beats and higher estimates make this stock attractive to aggressive growth investors.
Procera Networks, Inc. provides network traffic awareness,
analysis and control solutions for broadband service providers. It
offers intelligent policy enforcement solutions that enable mobile
and broadband network operators and entities to manage private
PKT Tops Expectations Three Straight Times
PKT has beaten the Zacks Consensus Estimate in each of the last
three quarters. One of the beats, in the September 2011 quarter
saw the company post earnings of $0.14, $0.18 ahead of the Zacks
Consensus Estimate of a loss of $0.04. The stock then moved
higher by 24% after that 450% beat.
The string of beats started in the June 2011 quarter when the
company posted EPS of one cent, but that was five cents ahead of
the Zacks Consensus Estimate of a loss of four cents. The stock
moved higher by nearly 5% following the report.
PKT Recently Reported Earnings
On February 21, 2012 the company reported revenue of $16 million
roughly $4 million more than the Zacks Consensus Estimate and
double the $8 million reported in the year ago period. EPS
of $0.12 was $0.08 ahead of the estimate or a 200% beat. As a
result the stock moved higher by about 7%.
Earnings Estimates Bumped Up
Following the most recent earnings report, analysts bumped up
their earnings estimates for 2012. The Zacks Consensus Estimate
for 2012 EPS moved from $0.35 in February 2012 to the current
level of $0.41.
Due to the recent shift to profitability, metrics like PE can now
be computed. This means some pretty high numbers for a small
company. A trailing PE of 86x means that it's very likely to be
higher than just about any industry average, but as earnings
continue to come in this metric will fall. The same can be said
about forward PE. A price to sales metric of 7x will also come
back to the industry average of 2.5x as sales increase in the next
The chart shows just what aggressive growth investors are looking
for, a consistent upward trend. The stock crossed its 200 day
moving average line about five months ago and hasn't looked back
since. Many stocks can say this, but as PKT continues to grow its
sales and earnings, more investors will dial up this
telecommunications play. PKT is a Zacks #1 Rank (Strong Buy).
Brian Bolan is the Aggressive Growth Stock Strategist
Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor