This telecom company beat analysts’ estimates by $0.12 last quarter, and Wall Street is forecasting triple-digit growth for the company this year.
Finisar Corporation (FNSR)
From Upside
One of the world’s largest suppliers of optical systems, Finisar Corporation’s (FNSR) products are used primarily for fiber-based data and telecom networks. Demand is fueled by the unquenchable need for bandwidth because of increased data and video traffic, reflecting growth in cloud computing, streaming video, and mobile traffic.
Finisar is vertically-integrated. The company says it manages its own supply chain to improve efficiency, reduce costs, and boost profit margins. An expansive client roster includes giants Cisco Systems, Alcatel-Lucent, and IBM.
The stock earns an Overall score of 89, reflecting ranks above 80 for Momentum and Quality. A strong balance sheet and healthy cash flow bode well for growth. Free cash flow has surged 242% over the past 12 months. For fiscal 2017 ending April, per-share earnings are expected to reach $2.15, up from $1.01. Revenue is projected to climb 18%. Key risks include uncertain capital spending by network providers and potential pricing pressure.
Finisar is being initiated as a Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, February 2017