SONS has been losing money since 2006. The new acquisition appears (on paper) to be a good one but likely it will be a while before it's fully integrated and adding more substance to the product line.
At least one analyst is actually predicting that SONS may be profitable this year and have net positive EPS. We'll have to wait and see on this one, in light of their 25% reduction in revenue guidance. Originally they had projected roughly 15-20% revenue growth but now it's likely they'll actually have lower revs than the previous year.
Competition in the field is tough and margins are low. CSCO, JNPR, EXTR and BRCD are considered competition. I have a friend who really likes the new BRCD products, fwiw.
With such a large reduction in the company's expectations, one has to wonder if they've lost an important customer or even a few of them.
They have cash and no debt, so that should help them survive this rough patch. Reverse splits and nearly a decade of losses does not help one give them the benefit of the doubt....to say the least.
They appear to be a value at this price level but that's only if they can execute better going forward. Price to sales seems in line with a company that has potential but has, once again, stumbled a bit.
If they have anything else that needs to be announced, IMO, now would be the time to do it. If they need a "kitchen sink" type of earnings report, again, it would behoove them to make it as bad as necessary, so that they can move beyond the disappointments and have a low bar to over come.
I think a good one to track going forward but certainly not a company for "widows and orphans".....
JMO
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