Financial Trading Blog
Stock of the day 22/12/2014 – CalAmp Corp
The wireless communications software and hardware device producer started the year strong, reaching an all-time-high shares price of $34.81 in early March, after starting the year at $28.22. However, the Q4 2014 earnings release in April saw a massive reversal of fortunes for the hot stock. Despite seeing a 24% growth in year on year revenue, up to $59.8 million, and earnings per share of $0.20, investors were disappointed with these figures. This was due to the missing of analyst forecasts of $61.49 million in revenue and $0.21 EPS, alongside lower-than-expected company guidance figures.
This disappointment had a serious sting in the tail for CalAmp’s share prices, with stocks plummeting 24.5% in one day from $21.39 to $18.60. This decline continued into May, where the company reached its 2014 nadir at $14.75 per share. What followed was a relatively stable few months following this slump, despite a 12% decline following the Q1 2015 figures. However, October saw another big increase following the Q2 figures, from $17.88 to $20.01, with EPS of $0.21 and $59.20 million in revenue.
Whilst nowhere near the early-2014 highs, it has shown investors’ willingness to reward CalAmp for strong earnings releases; on the other hand, investors have been equally willing to punish the company for any disappointing figures. The next two quarters (including this Q3 2015) are meant to see huge growth for CalAmp, largely based on its Caterpillar OEM business starting in earnest. With that in mind, the company is predicted to announce $0.23 earnings per share and $63.26 million in revenue.
CalAmp is now trading around $20.16 as its earning release approaches; 9 stock analyst groups have the company at ‘buy’, with only one at ‘hold’. This is a positive sign for the company, especially when the short term target price of $28.06 is factored in. Whilst this price would only return the company to the same levels as at the start of 2014, it at least would have weathered a stormy year on the markets with minimal damage.
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