1) Revenue comes out a bit short this quarter but next quarter guidance is fine. Significant growth on deferred revenue from Q1's $65.5 millions to $71.1 now vs. $39.5 millions prior year should appease any concern of this quarter's little revenue shortfall.
2) Gross margin comes out 47.6%, significantly ahead consensus of 45-46%. And the management strongly suggests this margin sustainable and has a long-term target of 50%.
I notice that the street is quietly bumping up EPS estimate. I don't have the consensus before ER. But I do think 3c per quarter bump reasonable given strong margin. At least two analysts bumps up target price significantly up to $15.
CALX and ADTN has a strange relationship. While ADTN had 47% gross margin in most recent quarter, a bit lower than CALX's, ADTN is selling at EV/sales of 2.1 while CALX only sells at 1.3. CALX carries a target price of $14.5, 17% higher than current price. ADTN has a target price of $22, 17% below the current price. CALX is selling at 16.4 times 2014 PE while ADTN is selling at 27.4 (both companies have significant cash). If I am not mistaken, CALX is taking some customers away from ADTN such as Quest.