Stocks with the technology to deliver any video format, over any network, to any IP connected device are about to skyrocket. Harmonic (HLIT) closed Tuesday a new 52-week high of $6.02 and Tuesday evening reported a non-GAAP EPS loss of ($0.02) down $0.05 from a non-GAAP EPS profit of $0.03 last year. HLIT's trailing 12 month non-GAAP EPS declined from $0.25 to $0.20 and the stock afterhours was trading for $5.89, which equals a P/E of 29.45.
While HLIT's non-GAAP EPS fell $0.05 year-over-year, their competitor Concurrent (CCUR) reports on April 23rd and CCUR is expected to report GAAP EPS of $0.09 and non-GAAP EPS of $0.13 vs. GAAP EPS of $0.04 and non-GAAP EPS of $0.08 last year. CCUR's trailing non-GAAP EPS will likely increase by $0.05 next week from $0.35 up to $0.40! This means CCUR will have double the trailing EPS of HLIT and CCUR closed Tuesday at only $6.77! With HLIT trading at $5.89 afterhours, CCUR could be ready to make a move to double HLIT's price or $11.78!
CCUR has just 8.72mm o/s, a market cap of $59.03mm, $24.6mm in cash, no debt, and an extremely low enterprise value of $34.43mm or only 0.55X its trailing revenue of $62.59mm. CCUR has large gross margins of 58.81%, which are 30.69% higher than HLIT's gross margins of 45%! HLIT is trading with an enterprise value/revenue ratio of 0.93. Clearly, CCUR deserves a multiple 30.69% higher than HLIT. This would give CCUR an enterprise value/revenue ratio of 1.22 and value CCUR at a share price of $11.58!
HLIT recently sold their very low margin cable access business for $46mm, which was breaking even with $52.9mm in revenues. HLIT's cable access business sold for 0.87X revenues when it only had low gross margins of 30%! CCUR's gross margins are nearly double and CCUR is about to report their 5th straight quarter of profitability! There is no way on earth that CCUR should have an enterprise value/revenue ratio of less than 1, which means CCUR should be trading at a minimum share price of $10!