Analysts are seeing positive signs in Irvine-based software and telematics maker CalAmp Corp.’s first-quarter earnings, which beat analysts’ estimates and sent its shares up 14% in the following trading session.
“I believe the shares are undervalued and the market was anticipating CalAmp would miss its results or lower guidance,” Managing Director Mike Walkley of Canaccord Genuity LLC told the Business Journal. “With the results above consensus and at the high-end of the guidance combined with management reiterating their full-year guidance, I believe this is causing the shares to rally and likely forcing some short investors to cover.”
He pointed out that with the business transformation to more software and services. CalAmp’s (Nasdaq: CAMP) larger hardware business has been declining and this has impacted the share price.
On June 27, CalAmp reported adjusted basis non-GAAP net income for the first quarter of $4.2 million, or 12 cents per diluted share, on sales of $89.1 million. That topped the consensus analyst estimate of $87 million in revenue and 9 cents a share.
“We were encouraged by the improved results, which suggest CalAmp has stabilized its supply chain and MRM telematics challenges,” William Blair & Co. Partner Jonathan Ho said in a note to investors. “While the company still has work to do to further improve efficiency in the supply chain and to integrate its acquired businesses, we believe investors will react positively to the improved execution.”
The company said it had made significant progress on strategic initiatives in the quarter with the achievement of record software and subscription services revenue and improved supply chain performance.
“Looking forward, we believe the first fiscal quarter represents an inflection point in our business, with a positive outlook of revenue and EBITDA growth as we move into the second half of the fiscal year,” Chief Executive Michael Burdiek said in presenting the results.
Separately, CalAmp sent Paul Washicko, senior vice president for product management, to a panel discussion in China where he issued a few warnings about the near-term future for self-driving cars.
“I believe expectations have changed about the speed to fully autonomous vehicles and fleets, which could pump the brakes on progress,” he told the panel in Shanghai on June 28.
Washicko said that evolution to fully autonomous vehicles “will take many years.”
“During this period, after-market solutions will inspire new opportunities in insurance telematics, fleet management, and emerging mobility service models,” Washicko said.
