Procera Networks: Investment Surge Set To Yield Meaningful Profits
Helix Investment Research
Helix Investment Research
Apr. 22, 2015, 12:45 PM
Apr. 22, 2015, 9:15 AM
Apr. 22, 2015, 8:08 AM
- Procera Networks (NASDAQ:PKT) +20% premarket after Francisco Partners Management agrees to buy the company for ~$240M; the P-E firm will pay $11.50/share for PKT, a 21% premium to yesterday's closing price of $9.51.
- PKT also says it sees Q1 revenues of $19.5M-$20.5M vs. $16.8M analyst consensus estimate, but expects to incur a Q1 net operating loss on a GAAP and non-GAAP basis; it is not revising its previously announced guidance for the full year.
Feb. 27, 2015, 5:23 PM
- In addition to beating Q4 estimates, Procera (NASDAQ:PKT) has guided for 15% 2015 revenue growth, well above a 4.8% consensus. Deutsche responded to the numbers by upgrading to Hold.
- The deep packet inspection hardware vendor added 13 new service provider customers in Q4, up from just 3 in seasonally weaker Q3 and down from 27 a year ago. 7 of the new customers were wireline carriers, 5 mobile carriers, and one a cable provider. Expansion orders were received from 50 existing service provider clients.
- EMEA made up 56% of revenue, the Americas 28%, Asia-Pac 16%. Mobile customers accounted for 56% of product revenue.
- Gross margin fell to 58.7% from 65.6% a year ago, and operating expenses rose 15% to $13.4M.
- With activists still circling, Procera ended Q4 with over $102M in cash/short-term investments (equal to 54% of its current market cap). TheDeal reported last month Procera has hired advisors to explore a potential sale.
- Q4 results, PR
Jan. 27, 2015, 2:40 PM
- Citing the big rally shares have seen over the last month, Raymond James has downgraded Procera (NASDAQ:PKT) to Market Perform.
- Shares are now up only 3% from where they traded before TheDeal reported on Friday Procera had hired advisors to explore a potential sale. They're still up 27% from their last trade prior to a Jan. 7 guidance hike.
Jan. 23, 2015, 4:05 PM
- TheDeal reports Procera (NASDAQ:PKT) has hired advisors to help it explore a sale. Activist Merriman Capital has to be pleased.
- Though having jumped over the last two months in response to new contracts and a Q4 pre-announcement, the deep packet inspection hardware specialist remains far below a 2012 high of $25.99. Procera has nearly $5/share in cash/investments on its books.
Jan. 7, 2015, 12:45 PM
Jan. 7, 2015, 9:33 AM
- Following a rough 2014, Procera (NASDAQ:PKT) is starting 2015 on a strong note: The company says it expects to report Q4 revenue of $23.5M-$24.5M, above a $20.9M consensus. Non-GAAP EPS is expected to be positive (consensus is at -$0.01).
- Full-year revenue guidance has been upped to $74M-$75M from $70M-$75M. Q4 book-to-bill was above 1, and gross margin is expected to be around 60%.
- Fellow deep packet inspection hardware vendor Allot (NASDAQ:ALLT) is following Procera higher. Activist Merriman Capital has been pushing Procera to evaluate "strategic alternatives."
Jan. 7, 2015, 9:20 AM
Dec. 16, 2014, 12:19 PM
- Procera (NASDAQ:PKT) has "received several-million dollars of orders from Tier 1 operators" for versions of its high-end PacketLogic 20000 deep packet inspection hardware system featuring 100G interface cards.
- SVP Andy Lovit: "Network operators are beginning to deploy subscriber experience and analytics solutions on 100GE instead of 10GE interfaces, and the PL20000 has segment-leading port density and performance for 100GE networks." The product can support up to 8 ports (4 channels) of 100G traffic, and has a max throughput of 600Gbps.
- With shares down 57% YTD going into today, it's relatively easy for good news to trigger a positive reaction. A high short interest (17% of the float as of Nov. 28) also doesn't hurt.
Dec. 10, 2014, 10:09 AM
- Citing concerns about weak carrier spending and management departures, BofA/Merrill has downgraded Allot (NASDAQ:ALLT) to Underperform from Buy, and slashed its target by $6.50 to $10.50 (still ~$2.50 above current levels).
- Allot has plunged to new 52-week lows, and is now down 47% YTD. The company announced a CFO change last month.
- Deep packet inspection hardware rival Procera (NASDAQ:PKT) is also off.
Dec. 5, 2014, 1:21 PM
- Hedge fund Castle Union Partners now owns a 1.36M-share (6.6%) stake in Procera (NASDAQ:PKT), up from the 5.0% stake it reported in October. (13D filing)
- Back in October, Castle Union said it might talk with Procera about "business and strategic alternatives," including a potential sale.
- Another activist, Merriman Capital, issued an open letter on Oct. 20 calling on Procera to evaluate strategic options.
- The deep packet inspection hardware vendor's shares are down 55% YTD, following multiple earnings disappointments. With a current market cap of $136M, Procera wouldn't be hard for a bigger telecom equipment player to digest, should one be interested.
Oct. 20, 2014, 10:48 AM
- "As you well know, there are abundant reasons to be dissatisfied with the performance of Procera (NASDAQ:PKT)," writes Merriman Capital's Ronald Chez in a sharply-worded open letter.
- Chez: "Procera operates in a rapidly growing market sector of significant potential, but the company continues to fail to execute on its strategies, and seems to be unable to seize upon market opportunities" He wants the company to hire an i-bank to help evaluate its options, and claims to have "spoken to several shareholders and investment bankers."
- Procera is less than two weeks removed from plunging thanks to a Q3/full-year warning. Shares -54% YTD.
Oct. 15, 2014, 4:07 PM
- In an encouraging sign for beaten-down telecom equipment and chip/component stocks, Adtran (ADTN +5.7%) managed to rally even though it guided on its Q3 CC (transcript) for a low-to-mid teens Q/Q revenue drop. Consensus (doesn't appear to have fully accounted for Adtran's Q3 warning) was for revenue to drop 2% to $154.9M in Q4.
- Adtran attributed much of its Q3 weakness to "a decline in Europe as a large project there had a seasonal slowdown." Enterprise softness also took a toll.
- The company "[expects] to see an upturn in this business" in 2015, but European sales are expected to remain soft in Q4. Other equipment vendors, such as Juniper (JNPR +2%) and Ciena (CIEN +2.7%), have provided weak guidance blamed on U.S. wireline capex; AT&T is generally seen as a big culprit.
- In addition to Juniper and Ciena, many other industry names have closed with healthy gains. PKT +6.3%. INFN +3.4%. ZHNE +6.7%. ALLT +5.2%. AFOP +4.5%. AMCC +12.5%. CYNI +4%. CALX +3.3%. FNSR +3.1%. UBNT +4.2%. OPLK +3.4%. RKUS +3.3%.
Oct. 10, 2014, 12:45 PM
Oct. 10, 2014, 10:58 AM
- Telecom equipment makers and their chip/component suppliers are seeing more pain after Juniper (JNPR -7.5%) and Procera (PKT -32%) issued Q3 warnings (I, II), the latest bad earnings news for an industry that has seen plenty due to soft wireline capex. A few enterprise-focused networking vendors are also having a rough day.
- Cisco (CSCO -3.1%) has fallen below $23.50, and Alcatel-Lucent (ALU -4.3%) below $2.50. Other decliners: CIEN -4.7%. JDSU -4.6%. FFIV -5.3%. ANET -7%. RKUS -5.7%. SONS -4.4%. INFN -2.4%. CYNI -3.5%. AMCC -10%. PMCS -3.4%. NPTN -7.7%.
- Analysts are defending Juniper, arguing (in remarks that also have implications for peers) bad news has been priced in and that telecom capex is likely to improve in 2015. Bulls have argued Web/mobile traffic growth and SDN/NFV investments will ultimately boost capex, in spite of industry service revenue pressures.
- The Nasdaq as a whole is down 1.2%. Chip stocks are off sharply following Microchip's warning and prediction of an industry correction.
- Yesterday: Telecom equipment stocks slump as capex worries persist
Procera Networks Inc is a provider of Subscriber Experience Assurance solutions based on Deep Packet Inspection technology, that enable mobile and broadband network operators and enterprises managing private networks.
Industry: Business Software & Services
Country: United States