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Analyst Blog

On May 28, Zacks Investment Research upgraded LightPath Technologies Inc. (LPTH) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

This optical product manufacturer delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 111.11%. LightPath Technologies has witnessed an upward revision in earnings estimates on the back of strong first quarter 2013 results.

LightPath Technologies’ third quarter fiscal 2013 earnings per share came in at 2 cents, surpassing the Zacks Consensus Estimate by 100%. The results benefited from the growth in mobile Internet usage and gradual recovery in the Chinese industrial tool markets. In addition, the diversified product offering of LightPath Technologies, serving a wide range of customers, also boosted the top line.

The strong performance of LightPath Technologies is reflected in the booking and bulging backlog of the company. In the reported quarter booking exceeded $3 million, while shipments touched $2.85 million. In addition, backlog at the end of Mar 31, 2013 was $5.01 million reflecting an increase of 14% from the prior year.

LightPath Technologies is most likely to repeat its strong performance in the upcoming quarters. The company is expected to register higher sales in the precision modeled lens product line, which is mainly due to an increase in mobile Internet usage. In addition, higher demand from the Chinese market and entry into the digital projection market will ensure a steady flow of orders.

The Zacks Consensus Estimate for 2013 increased 20% to 6 cents per share as all estimates were revised higher over the last 30 days. This is reflected in a year-over-year projected growth of 160%.

Other Stocks to Consider

Besides LightPath Technologies other operators in the industry with a favorable Zacks Rank are Maxwell Technologies Inc. (MXWL - Analyst Report), Stoneridge Inc. (SRI - Snapshot Report) and CalAmp Corp. (CAMP - Snapshot Report). Maxwell and Stoneridge presently carry a Zacks Rank #1 (Strong Buy), while CalAmp Corp. has a Zacks Rank #2 (Buy).

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