NEW YORK – While Ceragon Networks (NASDAQ:CRNT) is not the best know stock listed on the NASDAQ (NASDAQ:NDAQ), the company is a leader in high capacity wireless hauling. The company provides wireless backhaul solutions, which enables cellular operators and other wireless service providers to deliver voice and data services, such as Internet browsing, music and video applications.
The company is scheduled to release their third quarter earnings on Monday and consensus expectations of $ .13 loss per share on revenue of $ 95.93 million. This follows second quarter results of a $ .15 loss per share on revenue of $ 90.10, beating revenue expectations but posting a contraction of $ .23 per share compared to an EPS of $ .08 in the previous year. Given that revenue has fallen more than 20 percent in 2013, analysts are expecting a full year loss per share of $ .43, with an EPS of $ .11 for 2014.
On Friday, shares in Ceragon Networks closed at $ 3.34, down 1.44 percent on higher than average trading. Year-to-date, shares are down more than 22 percent and have a 52-week low of $ 3.00. The 50-day moving average is $ 3.81, while the 200-day moving average is $ 3.67 on a current market capitalization of $ 128.1 million.
In August, analysts at Canaccord Genuity cut their target price from $ 3.50 to $ 3.40 and placed a hold rating on the stock.
Some of the company’s competitors include Alcatel-Lucent (NYSE:ALU), Ericsson (NASDAQ:ERIC), Huawei (SZ:002502), and NEC Corp (TK:6701). All off these companies have gone through some form of market disruption in the past year and even though TechNavio expects the Global Ethernet Backhaul Equipment market to grow (incremental) at a CAGR of 4.85 percent from 2012 to 2016 it remains to be seen how Ceragon can compete against the bigger players over the long-term.
Whilst Ceragon’s most recent quarterly report showed an increase in revenues, costs are also up. Ultimately, investment in the company is a long-term play, not so much for a big increase in market share, but for a buyout offer that would push the share price above $ 5.00.