The hottest stocks in the upcoming months will be companies with the technology to deliver any video format, over any network, to any IP connected device. Harmonic (HLIT) rose to a new 52-week high today of $6.02 and after the close reported a non-GAAP EPS loss of ($0.02) down $0.05 from a non-GAAP EPS profit of $0.03 in 2012. HLIT's trailing 12 month non-GAAP EPS declined from $0.25 down to $0.20 and the stock afterhours was trading at $5.89, for a P/E ratio of 29.45.
While HLIT's non-GAAP EPS declined $0.05 year-over-year, their close competitor Concurrent (CCUR) reports on April 23rd and they are 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 rise by $0.05 next week from $0.35 up to $0.40! CCUR could have double the trailing EPS of HLIT and CCUR closed Tuesday at only $6.77! With HLIT trading for $5.89 afterhours, CCUR could make a move to double HLIT's share price or $11.78 per share!
CCUR has only 8.72mm o/s, a market cap of $59.03mm, $24.6mm in cash, no debt, and an enterprise value of $34.43mm or 0.55X its trailing revenue of $62.59mm. CCUR has big gross margins of 58.81%, which are 30.69% higher than HLIT's margins of 45%. HLIT is trading with an enterprise value/revenue ratio of 0.93. CCUR deserves a multiple that is 30.69% higher than HLIT. This would give CCUR an enterprise value/revenue ratio of 1.22 and value CCUR at $11.58 per share!
HLIT recently sold their low margin cable access business for $46mm. It was breaking even with $52.9mm in revenue. HLIT's cable access business sold for 0.87X revenue when it only had gross margins of 30%! CCUR's gross margins are nearly double this 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 below 1, which values CCUR at $10 even. CCUR could be ready to rally to $10+!