Acme Packet, Inc. (APKT)
- 35.75 (USD)
(+1.2 %)
9/3/2010 11:21:00 AM
APKT Stock Report
NASDAQ:
APKT
35.75
(USD)
(1.2 %
)
09/03 11:21 AM
Open
36
Day's Range
35.27
-
36.5
52Wk Range
7.54 - 34.25
Mkt Cap
2.1 Billion
Vol/Avg
807712/1.1 Million
Div/Yield
0.00%
Key Fundamentals
| Price (11:21 AM) | 35.75 |
|---|---|
| Volume (11:21 AM) | 807712 |
| Last Close Price | 35.75 |
| 10 Day Average Volume | 1.1 Million |
| 13 Week Price Range | 24.69 - 34.25 |
| 52 Week Price Range | 7.54 - 34.25 |
| LTM Revenue | 182.0 Million |
| Shares Outstanding (12/31/2009) | 62.3 Million |
| Market Capitalization | 2.1 Billion |
| Shares Held By Institutions | 7.6 Million |
| Institutional Holders | 210 |
| % Shares Held By Institutions | 79.26% |
| Earnings Per Share (EPS) | 0.3 |
| P/E Ratio | 69.9301 |
| Book Value Per Share | 4.0426 |
| Gross Margin | 81.08% |
| Annual Dividend | 0 |
| Dividend Yield | 0.00% |
| Beta | 1.866992 |
| Fiscal Year Ends | December |
About Acme Packet, Inc.
Acme Packet, Inc.is considered to operate in the Telecommunications sector. They specifically operate in the Communication Equipment business segment contained within the Communication Equipment industry.
Acme Packet sells a type of networking equipment referred to as session border controllers. These devices, which consist of Acme's proprietary software running on commodity hardware, function like a traffic officer, providing specialized routing, control, and security functions that prevent latency during a phone call or video presentation. This allows telecommunication service providers and enterprises to deliver secure and high-quality voice, video, and other real-time multimedia across points where different networks connect. These products are useful to telecommunications service providers and corporations as they strive to lower costs and offer new services, and as they combine separate voice and data networks into a common Internet-protocol-based infrastructure. These converged networks enable service providers to offer voice over Internet protocol, which routes phone calls using the Internet instead of the traditional phone network. Specialized hardware is needed for this, because while IP networks excel at delivering data such as e-mail and Web pages, their design is less suited for delivering real-time communications. Service levels quickly degrade when networks get congested, causing data packets to get delayed or dropped. Although minor delays aren't particularly noticeable for applications such as e-mail, these latency effects can ruin voice service. Acme Packet is the early front-runner in session border controllers, with about half the market. Unlike its competitors, Acme's product operates with equipment from a wide range of other suppliers. Partnerships with Ericsson, Alcatel-Lucent, Motorola, the Nokia Siemens Networks joint venture, Sprint Nextel, and Nortel give Acme a global presence enabling it to generate more than 50% of its revenue internationally.
Ockham's Rating/Recommendation Summary
Rating specific information requires Premium Access.Buy Now or Learn More about Ockham's Features and Services
APKT Revenue
Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 5 years. For, APKT the high and low end of the Price to Sales per share ratios are 7.87x and 3.03x respectively.
Notice that APKT's current Price to Sales per share ratio is 11.09x, which is high enough compared with historical norms of APKT to cause some concern. The current Price to Sales per share is near the upper end of the historical range. In our eyes, this is a negative factor because it is more likely that it will return to the normal range than continue rising outside of the range. At current sales per share levels, we would need to see a decline in the Price to Sales ratio of 103% merely to return APKT to its historical average.
APKT Cash Earnings
Looking at APKT specifically in their Cash Earnings capabilities, Ockham views APKT as significantly above its historical average multiple of Cash Earnings. Looking at the last 5 years we can get a good understanding of what investors have grown to expect from APKT. For example, APKT's Cash Earnings ratio per share has fluctuated between 18.32 and 54.81 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where APKT is with respect to prior business periods.
Therefore, at the current price of 32.39 and a Price to Cash Earnings ratio of 65.70, APKT is significantly overvalued. This diminishes the attractiveness of APKT until we see either a significant increase in cash earnings or a decline in price. A decline of the Price to Cash Earnings ratio of 79% is needed just to return to the historical cash earnings multiple.
APKT Dividends
When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for APKT to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis. As far as our investing methodology goes, it is not necessary to pay a dividend in order to get a favorable rating, so as for right now APKT gets a neutral rating for the dividend portion of the model. As you can see, we are not receiving historical dividend information from our data provider on APKT at this time.