I agree with your numbers. But I would like to add the following:
SSB states: "we expect a strong 3Q" they continue to say that they expect RDWR to exceed the estimates.
My analysis of this information is as follows;
Assuming a 30% increase in sales means $11M. this translates to a $2.5M sales increase which translates to additional profit margin of $2.1M (based on 84% cost of goods sold).
This $2.1 million less assumption of increased expenses of $1.575M (last Q increased by $1.5M) means additional net income of $525K which will mean very close to break even in operating income and an additional 3 cents EPS over the prior quarter($525K/17,000,000), or EPS of 10 cents for the quarter.
The analysts estimate have not changed since the beginning of the year. These estimates which have been proven low every quarter this year are obviously not updated. Apparently they do not adjust the numbers very often.
But as I wrote you before, even SSB states:
"Our EPS est. is $0.05 vs $(0.01) a year ago and consensus of $0.05 but we expect EPS to exceed our est. as has been the case each of the prior three Qs."
We have to apreciate your estimate. Almost the same as results released. I am glad that I agreed with the numbers. I also made nice investments. In coming days analysts should update their forecast. Looks like October was also good. I assume growth will continue in current quarter.With margin profit above 80%, an EPS for Q4 of $.12 will not be a surprise. Problem is what they are going to do with all the cash Company has in assests. If not acquiring FFIV maybe a dividend to miserable share holders might be a good idea. What do you think will be share price next week?
It still remains to be seen, but the company management and SSB have stated in the past that the 4th quarter will be the one in which the fruits of the compaq deal will start to show. They estimate that this deal will eventually make up 10% of RDWR revenues, so it is very significant so there may be an even bigger up side in this 4th quarter. This will increase sales. As to profit margins, it also remains to be seen if these high margins can be sustained. In analysts estimates, these margins are going down, but that has not happened yet.
At this rate, I would say that EPS should surprise and increase to at least 13 to 14 cents in Q4. And this not taking into account any major increases due to the Compaq deal.
As to cash in the bank, well I don't know about you, but these days just having this cash in the bank gives me a good feeling. They should be very prudent and use it only if the correct opportunity comes along.
Lastly, as to the price of the share in the next week that is a mystery. It is obviously a very low price. I don't think that it is possible to predict. I just feel that it is an obvious good buy at this ridiculously low price.