Where can the stock price go before end of year............
Sandvine should be priced relative to its peers in the market -- Namely
Allot
Procera
Both competitors are traded on the QQQ so they will always get a premium to a stock trading on the TSE -- especially true for high tech stocks as the TSE is mostly a Commonities and banking market -- not a lot of interest in looking for high tech gems on the TSE
.
But we will use an apple to apple comparison -- looking at this fiscal year 2013
Sandvine is on pace to grow revenue and be profitable --- let us say
FY13 revenue = $105Million
FY13 profits = 15 cents per share
ALLOT has revenue dropping and they are losing money
FY13 revenue = $90Million
FY13 profit = BIG LOSS
Allot is trading at a market cap = $440Million
SVC is trading at a market cap = $340Million
So it looks like SVC's stock price has some room to run given they are now the market leader again AND the only profitable DPI vendor. Sooooooo....
SVC should at a minimum trade at a similar value as Allot which would put the stock price of SVC = $3.45. That said the market leader and only profitable DPI vendor should really have a premium to its peers. So a stock price of over $4.00 would NOT be stretching the valuation.
So do not be surprised if this stock runs to $4.00 before Q4 financials come out in January.
GLTA
SA1
PS This comparison was done after Allot's market cap has already fallen over 50% in the past year.