Why CalAmp (CAMP) Stock Is Falling After Hours

NEW YORK (TheStreet) -- CalAmp (CAMP) was falling -14.7% to $21.00 in after-hours trading Thursday after missing analysts' estimates for earnings and revenue in the fiscal fourth quarter.

For its fiscal fourth quarter CalAmp reported earnings of 20 cents a share, missing analysts' estimates of 22 cents by 2 cents. Revenue rose 23.6% to $59.8 million in the quarter. Analysts surveyed by Thomson Reuters expected revenue of $61.49 million for the quarter.

"Our fourth quarter results included a 32% year-over-year increase in our Wireless Datacom segment revenues and included increasing contributions from auto insurance telematics where demand continues to ramp," president and CEO Michael Burdiek said in a press release. "However, performance issues on the part of a contract manufacturer that we inherited with the Navman Wireless product line acquisition prevented us from shipping approximately $2 million in product orders in the fourth quarter."

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TheStreet Ratings team rates CALAMP CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate CALAMP CORP (CAMP) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 1.1%. Since the same quarter one year prior, revenues rose by 43.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • CAMP's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CAMP has a quick ratio of 1.82, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to its closing price of one year ago, CAMP's share price has jumped by 148.42%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CAMP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 54.77% to $5.60 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 20.01%.
  • The net income growth from the same quarter one year ago has exceeded that of the Communications Equipment industry average, but is less than that of the S&P 500. The net income increased by 1.3% when compared to the same quarter one year prior, going from $4.16 million to $4.21 million.
  • You can view the full analysis from the report here: CAMP Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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