"An interesting BWA, VOIP and, ultimately, WiMax play"
management.itmanagersjournal.com
ALVR - Long (6-12 Months)
Alvarion (ALVR:Nasdaq), an Israeli company, is an interesting BWA, VOIP and, ultimately, WiMax play. Intel is using their system to develop the silicon. The "last mile" is a huge opportunity, BWA fills the rural niche well, and there is potential for vast long-term global growth in broadband. This in turn can ignite the "S" curve for the Internet over the next 5-10 years, and in the process create new adjacent "industries", jobs, and efficiencies. Alvarion is under-followed by the street, and so far as I am aware, CIBC is the only sell side coverage. The company has no debt, is just breaking even, and has substantial long-term (3-5+ years) global growth potential.
Here are some highlights from the company's recent conference call. First, revenues were up 11% sequentially and up nearly 60% year-over-year. Second, gross margins up to 41.2% and targeting 45% going forward. Third, broad-based sales by product and region were broad with 25% in North America, 30% in Europe, 26% in Latin America and 19% in Asia. The Latin American order was increased another $17million - totals $40 million, which will be mostly booked in first half 2004. ($37million in revenues = break-even). Fourth, cash increased by $1.2 million to over $150 million. Fifth, days sales outstanding (DSOs) were the same. Sixth, guidance for the fourth quarter was solid, with revenues expected at $36-40 million and EPS in the range of ($0.02) to $0.01.
Management figures that they have a 25-30% market share in China (mainly Beta) and 6-9 months to larger orders. WiMax is getting great momentum there, and it seems that we can expect an inter-operable commercial launch by mid-2004. I think this stock is right on the radar. |
