Infinera: Future Is Even More Exciting
Darspal S Mann
Darspal S Mann
Infinera: Raising Price Target As Performance And Potential Grow
Helix Investment Research
Helix Investment Research
Thu, Jul. 28, 3:03 PM
Thu, Jul. 28, 12:59 PM
Thu, Jul. 28, 10:05 AM
- Infinera (INFN -33.1%) beat expectations yesterday, but its demand and near-term revenue outlooks are bleak.
- The company projects Q3 revenue of $185M, +/- $5M. The midpoint of this guidance would denote a 20% Y/Y revenue decrease.
- Infinera has so far been downgraded at J.P. Morgan, Nomura, B. Riley & Co. and Raymond James.
- Management cites weakening demand in North America and Europe, long-haul win challenges and subsea business win rates lower-than-expected that the company expects to hurt revenue for a period of time going forward.
- This news comes only days after a strong cycle in the optical technologies sector was forecast.
- Other optical makers falling today include Lumentum Holdings (LITE -3.7%) NeoPhotonics Corporation (NPTN -4%), Fabrinet (FN -7.1%), Oclaro (OCLR -0.9%) and Ciena Corporation (CIEN -7.8%).
- Infinera earnings call transcript
Thu, Jul. 28, 9:16 AM
- Gainers: EVOK +31%. GRPN +29%. OCN +25%. ALR +20%. N +18%. ESI +15%. TPX +15%. GRUB +13%. LOGI +13%. VSTM +12%. CRUS +11%. ASPS +11%. CHCI +11%. EBIO +11%. AXTI +11%. VNR +9%. SPHS +9%. VGZ +8%. KONA +7%. CLF +6%. ARIA 6%. SPU 5%. YNDX 5%.
- Losers: INFN -32%. ARGS -18%. AVXL -10%. IVTY -10%. F -8%. CIEN -8%. CBD -8%. XCOM -7%. EXAS -6%. WFM -5%.
Wed, Jul. 27, 4:19 PM
Tue, Jul. 26, 5:35 PM
- ABCO, ABX, ACGL, AEM, AF, AGNC, AHL, ALEX, ALSN, AMCC, AMGN, ANIK, ARRS, ASGN, AXTI, BKCC, CA, CAKE, CBI, CBT, CDE, CMO, CMPR, CMRE, CNMD, COHR, CRUS, CSGP, CVTI, CW, CYS, DLB, DRE, ECHO, EFX, ELY, EQY, ESRT, ESV, EXR, FB, FBHS, FOE, FORR, GG, GPRO, GRPN, HOLX, HT, IAC, IBKC, INFN, INT, ISBC, KEX, KGC, KIM, KNL, KNX, KONA, KRA, KS, LLNW, LM, LOGI, LPSN, LRCX, MAA, MANT, MAR, MCK, MEOH, MKSI, MMLP, MMSI, MN, MOH, MUR, NATI, NE, NEU, NGD, NOW, NTGR, NTRI, NVDQ, NXPI, O, OCN, OI, ORLY, OTEX, PEIX, PPC, PSA, PXD, QDEL, QEP, QTM, RCII, ROIC, RRTS, SCI, SFLY, SIGI, SPRT, SPSC, SSNC, SU, TER, TILE, TIS, TMK, TMST, TTEK, TTMI, TYL, UNM, VAR, VNDA, VNR, VRTX, WFM, WFT, WIRE, WLL, WRE, WSR, XL, XLNX
Mon, Jul. 25, 12:44 PM
- Strong upward movement in Lumentum (LITE +8.3%), NeoPhotonics (NPTN +16.4%), Fabrinet (FN +8.1%), Oclaro (OCLR +5.4%) and Infinera (INFN +1.2%) on a Needham & Company report by analysts Alex Henderson, Quinn Bolton and James Ricchiuti.
- Upgraded each to a rating of Strong Buy from Buy.
- Lumentum price target of $40 up from $35 (current price $29.80), Fabrinet target of $48 up from $45 (current price $41.05), NeoPhotonics target of $18 up from $17 (current price $12.95), Oclaro target of $7.50 up from $7 (current price $5.50) and Infinera target of $20 (current price $12.24).
- From the report: "The bulk of the optical components industry is sold out, driven by strong demand out of China. The Metro Core market is just starting to ramp a multi-year build-out. Starting in CY3Q, the massive upgrade in Data Comm from 10G/40G to 25G/100G should kick in and ramp sharply into CY17 and CY18. Over the last 25 years, there has never been a cycle with three major drivers simultaneously."
- New China orders, sold-out conditions, metro network upgrades and server speed increases attributed to the bullish projections.
Fri, Jun. 3, 2:29 PM
- Networking vendor Infinera (NASDAQ:INFN) has eked out a decent gain this afternoon, up 0.8%, following Nomura's launch of coverage at Buy today.
- Jeffrey Kvaal put a $17 price target on the shares, implying 26% upside.
- The star of the company's story, he writes, is its supplying of cloud computing by selling into the "webscale" or "hyperscale" market, vs. a more traditional long-haul telecom market.
- "Infinera has had to serve the webscale market with a product designed for the long-haul telecom market, the DTN-X," Kvaal writes. "Even this product, though too slim for Tier 1 telcos, was over-engineered for the webscale players."
- The moves are shifting demand and slowing the company's market share gains in long haul, but cloud products should improve margins ahead: "Infinera has targeted long-term gross and operating margins of 50% and 15%, respectively. We see several drivers that will push the margin structure to and likely beyond 50% over time," including a cost-optimized Cloud Xpress offering and a still-growing installed base.
Thu, Apr. 28, 12:46 PM
Thu, Apr. 28, 9:16 AM| Thu, Apr. 28, 9:16 AM
Wed, Apr. 27, 5:41 PM
- Infinera (NASDAQ:INFN) has guided on its Q1 call for Q2 revenue of $255M (+/- $5M) and EPS of $0.17 (+/- $0.02), below consensus estimates of $272.2M and $0.22.
- The optical transport hardware vendor reports seeing "spending lumpiness" and uncertain investment timings among some clients. Rival Ciena (NYSE:CIEN) issued soft guidance in March, while blaming macro pressures and EMEA weakness. Juniper and Ericsson, which also have strong telecom capex exposure, have provided disappointing numbers this month.
- Infinera is now down 15.2% after hours to $13.20, after initially falling moderately in the wake of its mixed Q1 results. Ciena, which often goes in the same direction as Infinera, hasn't yet traded after hours since Infinera issued its guidance.
Wed, Apr. 27, 5:36 PM
Wed, Apr. 27, 4:48 PM
- Infinera (INFN +3%) is giving up today's gains in postmarket trading, down 2.1% after Q1 results where overall revenues grew 31% but missed slightly.
- Gross margin (GAAP basis) came to 47.5%, vs. a year-ago 47.2% and Q4's 44.5%. Operating margin fell to 6.1% from a year-ago 8.1%, but up from Q4's 5.3%.
- Revenue breakout: Product, $216.1M (up 34.3%); Services, $28.7M (up 10.4%).
- "We continued to execute well in the first quarter, winning deals across our product portfolio and delivering strong financial results," says CEO Tom Fallon.
- Conference call to come at 5 p.m. ET.
Wed, Apr. 27, 4:18 PM
- Infinera (NASDAQ:INFN): Q1 EPS of $0.19 beats by $0.02.
- Revenue of $245.05M (+31.1% Y/Y) misses by $1.06M.
- Shares -2.9%.
Tue, Apr. 26, 5:35 PM
- ACGL, AEL, AF, ALGT, AMKR, AMP, ANIK, AR, ASGN, AVB, AVG, BCR, BGC, BKCC, BLKB, CACI, CAKE, CAVM, CBL, CDE, CGI, CLI, CMO, CMPR, CNMD, CNO, CRY, CSGP, CVTI, DGI, DLB, DMRC, DRE, DTLK, DWRE, DXCM, ECHO, EFX, ELY, EQY, ESRT, ESV, EXTR, FB, FIX, FNF, FORM, FORR, FR, FSLR, GG, HOLX, HTCH, HY, IBKC, INFN, IPHS, KEX, KIM, KRA, KRC, KS, LLNW, LOCK, LOGI, LQ, MANT, MAR, MC, MEOH, MMLP, MN, MSTR, MTGE, NE, NEU, NGD, NTGR, NVDQ, OIS, ORLY, OTEX, PEB, PPC, PRXL, PYPL, QDEL, QEP, QGEN, RCII, RGLD, RNG, ROIC, SCI, SFLY, SGI, SIMO, SNDK, SPRT, SSS, STR, TAL, TER, TILE, TS, TTEK, TTMI, TXN, TYL, UHS, UNM, VAR, VRTX, WCN, WIRE, WLL, WRE, WSR, XL, XLNX
Tue, Mar. 22, 3:08 PM
- Infinera (INFN -6.7%) is off sharply after Microsoft (the world's #2 public cloud service provider) stated at the optical networking industry's annual OFC conference it prefers short-reach data center interconnect (DCI) modules that are built directly into Ethernet switches, rather than standalone DCI systems such as Infinera's Cloud Xpress.
- Microsoft's remarks came as chipmaker Inphi (IPHI +4.4%) unveiled a silicon photonics-based 100G transceiver for 80km DCI modules. Microsoft worked with Inphi to develop the solution, and provided a positive quote for Inphi's PR: "The ability to provide high bandwidth connectivity in a form factor that is smaller, uses less power and is less expensive than today's solutions is a benefit to Microsoft and the cloud market in general."
- Cloud Xpress has been expected to be a major growth driver for Infinera in the coming years, as major Web/cloud service providers continue rapidly building out their data center infrastructures. Infinera stated on its Q4 call (transcript) it had 20 Cloud Xpress invoice customers at the end of 2015, including "a number" of large Internet firms.
- While Infinera sells off, Ciena (CIEN +3.4%), which derives a large % of its sales from packet-optical systems that integrate Ethernet switching and optical transport functions, is rallying. Ciena entered the standalone DCI market last year through its Waveserver platform.
- MKM is defending Infinera, arguing today's selloff is an overreaction and that the Microsoft news was mostly priced in.