Acme Packet (APKT) Gets Cheaper, Falls 28% From High

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Robert DeFrancescos June 16, 2011

 Acme Packet (APKT) Gets Cheaper, Down 28% From High -----------------------------------------------------------------------------------------------------Tech-Stock Prospector is Prospector is now available in the Kindle Store in the Business & Investing section of the online magazine stand.   Heres the Kindle link: -----------------------------------------------------------------------------------------------------While Acme Packet (APKT, $62.80) shares are still pricey, theyre no longer priced for perfection. The stock has been hit fairly hard h ard during this recent correction, falling as much as 28% from the 52-week high of $84.50 (set April 29) at todays intraday low of $60.60. The forward P/E, based on the 2011 20 11 consensus EPS estimate of $1.16, now stands at  54, vs. the expected growth rate of 45%. At the peak, Acme Packet shares sported a forward P/E of 77. On the 2012 consensus co nsensus estimate of $1.50, the P/E comes down to 42. But per-sha per-share re estimates are still all over th the e place for next year, with the high estimate all the way up at $1.80. Acme Packet reported Q1 EPS of 27 cents, two cents above the consensus, on revenue of $74 million (+44.9% year over year), vs. the consensus of $71.3 million. One of the most mo st impressive metrics was that the company had a record quarter despite that fact that its largest customerVerizonaccounted for less than 20% of  total revenue, vs. 35% in Q4. Total revenue still managed to rise 5% sequentially, which indicates a much improved customer profile with less l ess reliance on one carrier. In fact, nine direct customers had revenue of more mo re than $1 million each, accounting for 72% of o f direct revenue, which itself represents 51% of total revenue. Gross margin fell 100 basis points sequen sequentially tially to 84 84%, %, while operating margin rose 100 basis points sequentially to 40%. Internatio International nal revenue account for 40% of total revenue, up from 35% in Q4. Q4 . Acme Packet ended the quarter with $298 million in cash & investments, up from $276 million at the end of December. The company now sees revenue growth of 35% for the year, up from its previous forecast of 30%, but in line with the 2011 consensus es estimate. timate. Per-share earnings are expected expected to come in at $1.10 to $1.15 (previous guidance was $1.05), vs. the consensus (at the time) of $1.09. ------------------------------------------------------------------------------------------------------


Tech-Stock Prospector is Prospector is now available in the Kindle Store in the Business & Investing section of the online magazine stand. Heres the Kindle link:   -----------------------------------------------------------------------------------------------------Tech-Stock Prospector Managing Editor Rob DeFrancesco has more than 20  years of experience covering the tech sector. He is a former senior writer with Louis Rukeysers Wall Street   ., launched in 2003, is an investment-research service  focused primarily on the networking, storage, security, wireless and software  sectors. Annual subscription: $350. For more information or to place an order, call 800-392-0998.

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