Part of the problem for the company and investors is that there is only one Wall Street analyst providing estimates. And when that analyst gets the projections wrong, everyone is disappointed.
The other problem seems like a good one to have on the surface: one of AFOP's big customers is Google GOOG. And after a quarterly sequential revenue ramp in 2013 of $12 million, $19 million, and $23 million, things were looking pretty for the company.
But the revenue decline in Q4 to $21.8 million, on top of reliance for 42% of those sales from one customer, sent many investors looking for fiber elsewhere.
Right now, the single covering analyst for AFOP is projecting EPS of $1.19 for this year and $1.08 for next year, representing 33.7% growth in 2014 and a -9.25% setback in 2015.
Speaking of other sources of fiber for your portfolio, investors may want to consider Finisar FNSR, a $2.3 billion provider of fiber optic subsystems which enable high-speed data networks.
FNSR just logged its first 2 back-to-back quarters of $1 billion+ in sales and is expected to grow EPS at 309% this year and 13% next year with new opportunities in the 100G landscape in China.
Disclosure: I own shares of FNSR for the Zacks Follow The Money Portfolio.
Kevin Cook is a Senior Stock Strategist for Zacks.com where he runs the Follow The Money Portfolio.
ALLIANCE FIBER AFOP: Free Stock Analysis Report
FINISAR CORP FNSR: Free Stock Analysis Report
GOOGLE INC-CL A GOOG: Free Stock Analysis Report
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