CRNT pretax margins (adj) came in a little lower sequentially, but I think that was because of the rev mix. Most of the growth was in India, which carries lower margins. The non-GAAP tax rate was also high (I calculated it at ~27%). The company would have reported closer to 0.05 eps in Q4 if it had been 20-21%.
The guide appears to be for eps (non-gaap) of around 0.28 - 0.29. Maybe just a bit shy of the aggressive analyst est? Still, that's a 40% increase in eps at the low end. What is the appropriate forward multiple here? I still think this will see the low 3s, at minimum and could reach the low 4s with a PE multiple expansion up to 15x, which is certainly reasonable given the growth forecast.
The stock does have a history of selling off a bit after earnings, but I still think its too cheap. I'm holding.
