11-10-2017, 09:39 AM
The bear and bull case, from RJ:
Bull: AOI pivots sales to 100G products from 40G ramping with Microsoft, stable with Facebook and 100G at Amazon recovers starting in 4Q17 […] [2018] In this scenario, sales reach $566 million, up 44% y/y and EPS reach $7.03. Upside prospects include Google and OEMs (e.g., Cisco), as well as the early adoption of 200G [...] A bull case reflects Amazon snapping back leading to fair value of $120.
Bear: 2018 Sales decline 5-10% vs. 2017 [...] AOI loses 100G at Amazon; Amazon stops purchases of 40G and contributions from the operator fall to zero. Demand from Facebook plus Microsoft stalls at $70-75 million quarterly. AOI losses share at each […] AOI becomes a broken story. Under this case, our 2018 sales are $366 million with EPS of $2.67 [...] a bear case reflects no Amazon recovery and share loss elsewhere yielding a fair value of $27.
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