CalAmp (CAMP 19.60, +0.35, +1.8%) is a pure-play pioneer in the connected vehicle and Internet of Things (IoT) marketplace. It is also a company with a red-hot stock this year. To wit, CAMP was up 32.8% at Tuesday's close. The stock is padding those gains today, too, after the company reported its fiscal first quarter results and issued second quarter guidance.
The first quarter results exceeded analysts' average expectations. Nevertheless, they were short on growth.
Revenues declined 3.3% year-over-year to $88.1 million, the non-GAAP gross margin dipped to 42.5% from 42.6%, and non-GAAP earnings per diluted share were $0.29 versus $0.30 in the same period a year when the weighted average diluted share count was higher.
To be fair, the revenue decline accounted for the impact of the company's shuttered satellite business. Excluding the satellite business, revenue was up 6% from $82.7 million in the first quarter of fiscal 2017.
CalAmp said it grew its core telematics and subscription revenues and that it sees additional opportunities from large customers due to investments it will be making in its core technologies and an expansion of its strategic partnerships with IoT industry leaders.
The second quarter forecast from CalAmp calls for consolidated revenue in the range of $86 million to $91 million and non-GAAP net income in the range of $0.23 to $0.29 per diluted share. The midpoint of those respective ranges is below analysts' average expectations, whereas, the high end is no worse than in-line with their average expectations.
On a related note, Craig Hallum raised its price target for CAMP following the report to $23 from $19, saying it sees a path for the stock to trade north of 18x earnings should fundamentals continue to pick up. At its current price, CAMP trades at approximately 16.6x estimated fiscal 2018 earnings.