Tag Archives: NASDAQ:INFN

Infinera: Zacks’ Bull of the Day Play

Infinera Corp (INFNSnapshot Report) recently crushed the Zacks Consensus Earnings Estimate for the seventh consecutive quarter, and beat the Zacks Consensus Revenue Estimate for the third consecutive quarter as well.  The beats were attributed to gross margins, operating margins, broad-based customer strength and their CloudXpress products.   Therefore, Infinera has become the Zacks Bull of the Day.

This Zacks Rank #1 (Strong Buy) provides Digital Optical Networking systems to telecommunications carriers, cable operators, and other service providers worldwide.  Infinera’s large-scale photonic integrated circuit incorporates hundred Gigabits per second of transmit and receive capacity and the functionality of more than sixty discrete optical components into a pair of indium phosphate chips.

The innovative CloudXpress currently has 7 customers, including 3 new clients, and it is expected that these customers will generate revenues between $35-$60 million in 2015.  Further, the company has seen customer strength in several other segments which has improved overall gross margins (+47.8%), and operating margins (+12.2%).

Increasing Estimates

The table below shows the historic and future EPS estimates for Infinera.

Over the past 30 days, estimates for Q2 15, Q3 15, FY 15 and FY 16 have all increased; Q2 15 rose from $0.04 to $0.05, Q3 15 increased from $0.07 to $0.08, FY 15 went from $0.25 to $0.27, and FY 16 rose from $0.44 to $0.55.

Positive Earnings Surprise and Guidance

Historically, Infinera has crushed the Zacks Consensus Earnings Estimates.  Over the past 4 quarters, Infinera has posted and average positive earnings surprise of +195%, with a huge +120% earnings beat last quarter.  For Q2 the company issued revenue guidance of between $195-205 million, which would indicate 21% year over year growth (midpoint).

Bottom Line

Infinera’s CloudXpress, solid margins, and a growing customer base has the company poised for long term earnings and revenue growth.  Further, the company continues to innovate and produce new products for their diverse customer base.  The company announces Q2 earnings data on 7-22-15.

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Infinera: Zacks’ Bull of the Day Play

Infinera Corp (INFNSnapshot Report) has seen its estimates increase due to the Cloud Xpress product launch announced in mid-September, and its metro cloud market transition.  These factors, combined with the decreased worry regarding negative European revenues (which accounted for about 15% of total revenue in the first half of 2014), have made Infinera Zacks Bull of the Day.

This Zacks Rank #1 (Strong Buy) stock provides digital optical networking systems to telecommunication carriers, cable operators and other service providers worldwide.  Further, Infinera reports Q3 2014 earnings after the bell tomorrow.

It is expected that Infinera’s Cloud Xpress will cut power usage by 50% compared to comparable metro cloud solutions.  It was announced that Cloud Xpress will begin shipping in December of this year, and that Infinera sees strong and immediate demand for its optical transport solutions.

Increasing Estimates

The table below shows the historic and future Price and Consensus estimates for Infinera.
Over the past 90 days the FY 2014 EPS estimates have risen from -$0.04 to $0.06, and have also increased for Q3, from -$0.01 to $0.02.  These numbers reflect the positive traction from the Cloud Xpress, and its metro cloud market.

Positive Earnings Surprise

Historically, Infinera has destroyed the Zacks Consensus Earnings estimate.  Over the past 4 quarters, Infinera has posed an average positive earnings surprise of 199.1%, with a massive 400% positive earnings beat last quarter.

The table below shows the past four years of EPS Surprises for Infinera, and as you can see, INFN has a strong history of not only beating earnings, but crushing them.

Company Data

After more than 15 consecutive quarters of negative Return on Total Capital, Return on Equity, Return on Tangible Equity, and Return on Assets, Infinera was able to post positive returns in all 4 categories for the second quarter 2014.  This trend is expected to continue with the launch of the Cloud Xpress and its metro cloud market transition.

Bottom Line

Infinera has two solid new products that have high demand and high functionality.  These new products coupled with less weakness in Europe has Infinera poised for a solid jump in price appreciation over the next 1-2 days.

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