Earnings should be very telling as to how accurate the company is in giving out guidance.
Here is the guidance given out for this year during the last PR release:
For the full year, 2005, Arotech reiterates its guidance for at least 25% revenue growth compared to the previous year. Adjusted EBITDA from existing operations is projected to triple, primarily reflected in a stronger second half of 2005, compared to 2004.
For the second quarter 2005, revenues are expected to increase by over 30% compared to the second quarter of 2004. The Company expects adjusted EBITDA to be break even or above for the quarter."
Breaking that down, it means there are some impressive quarters coming up.
This quarter will there will be a 30% sequential increase in revenue growth followed by a quarter with 50% sequential revenue growth.
The big question is....will they hit those numbers???
The stock price is sure acting like it's one big fantasy. ARTX is trading for a little over 1.3 X this years sales, and for a company with growth like what's being predicted that is like stealing.
So, either we're all in for some serious disappointments going forward or the stock price is going to take a major leap.