According to Lightwave,the 100G optical transceiver and component market spend will be about $1billion in 2015. Looks like OCLR will have $150-180 million of that market, 15% market share on the low end. Supposing no market share gains (or losses for that matter), OCLR's FY2019 100G market share would be~$500M using Lightwaves 2019 $3.3B estimated 100G OTC spend. OCLR has said their 40G is going to zero but their 10G revenue will continue as that market continues single digit annual growth. I'll use $25M/qtr($100M annual) for this example,(currently its $30M+/qtr.). So, what do we have for CY2019: $500M(100G)+$100M(25G)=$600M annual rev. Breakeven? Call it $100M/qtr~$400M/yr, leaving $200M profit for CY2019. With 35M shares converted added to the current ~110M we've got 145M shares and $200M in profit giving us an TTM EPS of $1.38/sh. Throw a TTM EPS multiple of 20 on that and OCLR is tradin at $27.60. How bout them apples?
Andrew Schmitt expects to see a significant change in the 100G datacenter market place next year: “All of the key components needed for low cost 100GbE will be in place, including QSFP28 optics. The large internet content providers are all planning to shift to 100GbE in 2016 and this will drive enormous sales volumes.
“The main types of optical communications devices in demand will be CFP2-ACO [CFP2 form factor pluggable analogue coherent optics] based on indium phosphide. This will be the breakout technology for photonic integration. I don't think 2016 will be a breakout year for silicon photonics, except in PSM4 QSFP28 applications, which will ramp.”
So which suppliers can expect to have significant market positions if these forecast changes come to pass? Schmitt commented, “I think the leader in CFP2-ACO will be Oclaro."
cmon, after a 50%+ move to the upside, a pullback to the 50DMA is not only warranted, but healthy. My guess is OCLR moves up through $3.00 going into earnings in August. If you wanted to get in you should have bought this morning. IMO.
It takes time to make things happen in such a tight industry. Kudos to management for the work they've done...
Jefferies Summit - August 25, 2015 - Full presentation on Oclaro Investors Website
"Well Positioned For Sustained Growth In 2015 And Beyond
Driving Growth Through Traction in 100G and Above
─100G+ related revenue up ~50% year over year
─Broad 100G+ product portfolio serving a $1B addressable market in 2016
─Continuing to innovate for 100G and beyond
100G Client Side
─Market Leader for 100G Client Side (CFP, CFP2,CFP4): $350M 2016 SAM
─Emerging 100G Data Center (QSFP28): $150M 2016 SAM
100G+ Line Side
─Coherent CFP2-ACO for 100/200G Long-Haul, Metro Markets, and Data Center Interconnect
o First samples shipped in May 2014; meaningful revenue by end of CY15
o Industry analysts forecasting this to be a $200M market in 2016
─Gaining share in micro-ITLA and Lithium Niobate Modulators: $300M 2016 SAM"
comicguy8, I know a lot about fiber and all the stuff it relates too because I do my DD and read everything I can about fiber and I also eat a high fiber diet.
My favorite breakfast is shredded wheat and mule milk.
Sentiment: Strong Buy
New lightcounting report estimates that just Web2.0 customers will be consuming 50 million OTC units annually and spending $5 billion annually for those units by 2021. That's just Web2.0. From a previous lightwave article, the spend by web2.0 companies wiil be equal to/greater than the telecom spend by that time. Compelling.............?
Coherent optical @ a reasonable price is a major breakthrough. Suggest you read some of the articles written on this over the last 15 years. All the pieces are coming together. Not just what OCLR brings to the table, but all the puzzle piece makers.
Its also been 2 months since 4 insiders stepped up and purchased shares on the open market, just below current price. 2/3 of the way through the current qtr to be reported. I think we're goin higher.
Let's look at the OCLR outlook for 2016.
In 2016 Oclaro can take marketshare in 100G with the the award winning CFP2 ramping up and the Oclaro fabs with spare capacity for volume production
Gross margins should match the Finisar 30%+ GM's.
The FNSR-JDSU merger should make OCLR the alternate 100G vendor for all large OEM's.
OCLR price in 2016?
The main types of optical communications devices in demand will be CFP2-ACO [CFP2 form factor pluggable analogue coherent optics] based on indium phosphide. This will be the breakout technology for photonic integration. I don't think 2016 will be a breakout year for silicon photonics, except in PSM4 QSFP28 applications, which will ramp.”
So which suppliers can expect to have significant market positions if these forecast changes come to pass? Schmitt commented, “I think the leader in CFP2-ACO will be Oclaro.
Check out optics "dot" org for this article
During the June quarter, we began to ramp shipments of pre-production units of our coherent CFP2-ACO product for customer system integration and verification. We will continue to see volumes grow this quarter, and as previously discussed, we are expecting meaningful revenue in our December quarter or our Q2.
For the balance of this calendar year, the CFP2-ACO will be primarily shipped from our U.K. production line. In addition to this line, this quarter, we began trading builds for the coherent CFP2-ACO in our Shenzhen facility. We will begin building Shenzhen qualification modules during this quarter, as we prepare to go into higher levels of volume production in Asia during the first half of 2016. Our plan remains to ship early production units out of the U.K., with high volume production coming out of Asia.
In terms of the market, we continue to support numerous customers for applications in the long haul, metro and datacenter interconnect markets. Demand continues to be strong, and we have build up a healthy backlog.
One dynamic that we are seeing, is stronger market demand for coherent CFP2 transceivers, which operate at both 100 and 200 gigabits. To reinforce our strong position in the CFP2 ACO space, we want to emphasize the fact that we have been successfully shipping CFP2 ACO product for use in both 100G and 200G applications. I also would like to remind you, that about one year ago at ECOC 2014, Oclaro demonstrated the industry's first CFP2 ACO operating at 200G.
It has been our experience that the designing process for coherent CFP2-ACO is quite lengthy and complicated. There are many hand shaking functions and interactions between the transceiver and the customer's DSP. For these reasons, we believe that there is a significant advantage to being first to market, and we believe we are the leading supplier.