JDS Uniphase Gets Ahead, Of Itself
JDS Uniphase (NASD:JDSU) provides optical products for the telecom, cable and network equipment manufacturers. It's started to become a very good business, and recent positive announcements from companies like Level 3 (NASD:LVLT) have only served to fuel the fire.
The company had an impressive quarter-over-previous-quarter ramp in calendar 2005 (the company is on a mid-year to mid-year fiscal). The top-line went from $166 million in Q1 to $171 million in Q2 to $258 million in Q3 and $313 million in the year's final quarter.
The company did say it expected sales in the current quarter to be flat at $304 to $321 million as compared to the immediately previous quarter.
As Forbes (www.forbes.com) pointed out recently the increased commitment to fiber by the likes of Verizon (NYSE:VZ)is likely to accelerate the trends that have helped Uniphase grow.
After a lot of analyst upgrades late last year, the last two ratings on the stock according to Yahoo!Finance (finance.yahoo.com) where a downgrade to Hold by Needham and an initiation at CIBC at Sector Perform. Neither was exactly a ringing endorsement for the stock at current levels, so there is obviously concern about whether the rising tide in fiber will lift all ships.
The stock has made a huge move up over the last year from $1.32 to $4.25, which is where it trades now. With a $7 billion market cap, the company trades at about eight times sales and Yahoo!Finance shows a forward PE of almost 85.
For a company that expects a flat quarter and that still has a way to go before it can demonstrate that it can show a record of profits, the current stock price seems far too high.
Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He was also president of Switchboard.com, which was the 10th most visited site on the web at that time, according to MediaMetrix. He has been chief executive of FutureSource, LLC and On2 Technologies, Inc. and has served on the boards of TheStreet.com and Edgar Online. He does not own securities in companies he writes about.
JDS Uniphase (NASD:JDSU) provides optical products for the telecom, cable and network equipment manufacturers. It's started to become a very good business, and recent positive announcements from companies like Level 3 (NASD:LVLT) have only served to fuel the fire.
The company had an impressive quarter-over-previous-quarter ramp in calendar 2005 (the company is on a mid-year to mid-year fiscal). The top-line went from $166 million in Q1 to $171 million in Q2 to $258 million in Q3 and $313 million in the year's final quarter.
The company did say it expected sales in the current quarter to be flat at $304 to $321 million as compared to the immediately previous quarter.
As Forbes (www.forbes.com) pointed out recently the increased commitment to fiber by the likes of Verizon (NYSE:VZ)is likely to accelerate the trends that have helped Uniphase grow.
After a lot of analyst upgrades late last year, the last two ratings on the stock according to Yahoo!Finance (finance.yahoo.com) where a downgrade to Hold by Needham and an initiation at CIBC at Sector Perform. Neither was exactly a ringing endorsement for the stock at current levels, so there is obviously concern about whether the rising tide in fiber will lift all ships.
The stock has made a huge move up over the last year from $1.32 to $4.25, which is where it trades now. With a $7 billion market cap, the company trades at about eight times sales and Yahoo!Finance shows a forward PE of almost 85.
For a company that expects a flat quarter and that still has a way to go before it can demonstrate that it can show a record of profits, the current stock price seems far too high.
Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He was also president of Switchboard.com, which was the 10th most visited site on the web at that time, according to MediaMetrix. He has been chief executive of FutureSource, LLC and On2 Technologies, Inc. and has served on the boards of TheStreet.com and Edgar Online. He does not own securities in companies he writes about.
posted by douglas mcintyre at 10:15 AM
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