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Why Shares Of Acacia Communications (ACIA) Are Surging Today
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Shares of Acacia Communications Inc. were trading much higher Friday after the company released its most recent quarter’s financial results, which excited investors greatly. ACIA was trading more than 39% higher, above $94 a share around 3:15 PM ET.
Much of the momentum behind the stock’s price came from major beats in the company’s earnings report. ACIA reported adjusted EPS of $0.43 which were much higher than expected, as the Zacks Consensus Estimate called for $0.13 per share. The company also posted a major beat on revenue, posting sales of $116 million, again much higher than the Zacks Consensus Estimate, which was $86 million.
The company’s gross profit margin, on a non-GAAP basis, of 47% was up from the Q1 level of 41.9%, and well above last year’s level of 35.3%. ACIA also said it now projects revenues for the current quarter to be between $120 million and $128 million, and EPS to come in between $0.64 and $0.76.
Acacia develops silicon-based digital processors that process light signals coming in and out of routers, as well as other devices. Basically, the technology makes it easier and more economical for network providers to construct systems.
Acacia’s jump lifted several others in the optical business Friday, with Oclaro jumping 8%, Finisar jumping 2.5%, and Lumentum Holdings (LITE - Free Report) up over 1%.
The only real negative of the report from the company was scrutiny of its top cutomer, ZTE, the Chinese equipment and smartphone maker that is the company’s number one customer. ZTE has periodically been blocked from the U.S. market by Congress, and so it can be seen as a liability for Acacia, though analysts were encouraged from the report as it seems like the company may be broadening out from its reliance on ZTE.
ACIA is currently a Zacks Rank #3 (Hold), and shares of the company are up over 203% year-to-date after Friday’s big jump.
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Why Shares Of Acacia Communications (ACIA) Are Surging Today
Shares of Acacia Communications Inc. were trading much higher Friday after the company released its most recent quarter’s financial results, which excited investors greatly. ACIA was trading more than 39% higher, above $94 a share around 3:15 PM ET.
Much of the momentum behind the stock’s price came from major beats in the company’s earnings report. ACIA reported adjusted EPS of $0.43 which were much higher than expected, as the Zacks Consensus Estimate called for $0.13 per share. The company also posted a major beat on revenue, posting sales of $116 million, again much higher than the Zacks Consensus Estimate, which was $86 million.
The company’s gross profit margin, on a non-GAAP basis, of 47% was up from the Q1 level of 41.9%, and well above last year’s level of 35.3%. ACIA also said it now projects revenues for the current quarter to be between $120 million and $128 million, and EPS to come in between $0.64 and $0.76.
Acacia develops silicon-based digital processors that process light signals coming in and out of routers, as well as other devices. Basically, the technology makes it easier and more economical for network providers to construct systems.
Acacia’s jump lifted several others in the optical business Friday, with Oclaro jumping 8%, Finisar jumping 2.5%, and Lumentum Holdings (LITE - Free Report) up over 1%.
The only real negative of the report from the company was scrutiny of its top cutomer, ZTE, the Chinese equipment and smartphone maker that is the company’s number one customer. ZTE has periodically been blocked from the U.S. market by Congress, and so it can be seen as a liability for Acacia, though analysts were encouraged from the report as it seems like the company may be broadening out from its reliance on ZTE.
ACIA is currently a Zacks Rank #3 (Hold), and shares of the company are up over 203% year-to-date after Friday’s big jump.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Interested in the other top stories of the week? Listen to Zacks Friday Finish Line to catch up on the week’s financial and investment news!