Stock Alert for Openwave Systems Inc. ($OPWV)
Openwave Systems Inc. (NASDAQ: $OPWV)
Openwave Systems Inc. (OPWV) is a provider of software solutions for the communications and media industries. The Company provides software and services to mobile and wireline operators, and broadband service providers. Its product portfolio provides a complete range of service management, messaging and location technologies. OPWV serves the market with four product lines: Service Management, formerly known as Gateway, that manages content and media; Messaging enables enhanced, integrated mobile and broadband communications through converged, Internet protocol (IP)-based multimedia messaging products; Location enables location-based services through infrastructure and applications for both emergency and commercial location services; and Mobile Analytics helps operators identify and manage bandwidth allocation, as well as make business decisions.
The Company was founded in 1994 and is headquartered in Redwood City, California.
| Share Statistics (10-May-10) | FY
2007 |
FY
2008 |
%
Chg |
Q4 2008 | Q4 2009 | %
Chg |
||
| Symbol | OPWV | Revenue, $Mn | 290.3M | 200.9M | 30.8% | 53.49M | 47.94M | 10.4% |
| Current price | $2.46 | Gross marg. | 54.7% | 55.5% | 1.5% | n/a | 61.0% | n/a |
| 52wk Range: | $3.13-1.14 | Oper. margin | -51.5% | -32.4% | 37.1% | n/a | -4.9% | n/a |
| Avg Vol (3m): | 675,355 | Net margin | -67.7% | -10.9% | 83.9% | n/a | -7.2% | n/a |
| Market Cap. | 206.09M | |||||||
| Dil. Shares Outst. | 83.8M | EPS, $ | -1.13 | -0.79 | 30.1% | -0.30 | -0.04 | 86.7% |
Source: Reuters.com, SEC Filings.
Financial Summary
OPWV recently announced that revenues for the third fiscal quarter ended March 31, 2010, were $40.1 million, compared with $49.7 million in the prior quarter ended December 31, 2009, and $44.7 million in the March quarter in the preceding fiscal year. Bookings for the third quarter of fiscal 2010 were $41.1 million. The Company ended the quarter with $123.6 million in cash and investments.
On a GAAP basis, net loss for the third fiscal quarter ended March 31, 2010, was $4.2 million or $0.05 per share, compared with a net income of $213,000, or $0.00 per share, in the prior quarter and a net loss of $7.8 million, or $0.09 per share, in the March quarter in the preceding year.
On a non-GAAP basis, net loss for the third fiscal quarter ended March 31, 2010, was $2.0 million, or $0.02 per share, compared with a net income of $3.5 million or $0.04 per share, in the prior quarter and a net income of $386,000, or $0.00 per share, during the March quarter of the prior year. Non-GAAP net income (loss) excludes restructuring, impairments, amortization of intangibles and stock-based compensation, amounts associated with certain unusual events, discontinued operations, realized losses on auction rate securities and the tax impact of these items.
| Financial Strength (10-May-2010) | Company | Industry | Sector | S&P 500 |
| Quick Ratio (MRQ) | 2.02 | 1.77 | 1.36 | 0.83 |
| Current Ratio (MRQ) | 2.02 | 1.91 | 1.60 | 0.96 |
| Long-Term Debt to Equity (MRQ) | 0.00 | 36.62 | 18.16 | 121.92 |
| Total Debt to Equity (MRQ) | 0.00 | 58.66 | 29.63 | 185.31 |
Source: Reuters.com, SEC Filings.
Analyst Consensus
| Buy | Outperform | Hold | Underperform | Sell | No Opinion |
This is the consensus forecast amongst seven polled investment analysts. Against the Openwave Systems Inc company.
| Analyst Detail | Buy | Outperform | Hold | Underperform | Sell | No Opinion |
| Latest | 1 | 1 | 4 | 1 | 0 | 0 |
| 4 weeks ago | 1 | 1 | 4 | 1 | 0 | 0 |
| 2 months ago | 1 | 0 | 4 | 1 | 0 | 0 |
| 3 months ago | 1 | 0 | 4 | 1 | 0 | 0 |
| Last year | 0 | 0 | 7 | 0 | 0 | 0 |
The four analysts offering 12-month price targets for OPWV have a median target of 3.50, with a high estimate of 4.00 and a low estimate of 2.50. The median estimate represents a 50.21% increase from the last price of 2.33.
Source: www.ft.com
Consensus Estimates Analysis
| # of Estimates | Mean | High | Low | 1 Year Ago | |
| SALES (in millions) | |||||
| Quarter Ending Jun-10 | 7 | 42.54 | 44.36 | 41.10 | 46.63 |
| Quarter Ending Sep-10 | 7 | 44.47 | 48.45 | 41.80 | 48.80 |
| Year Ending Jun-10 | 7 | 182.22 | 184.04 | 180.70 | 180.22 |
| Year Ending Jun-11 | 7 | 181.30 | 189.92 | 171.70 | 201.50 |
| EARNINGS (per share) | |||||
| Quarter Ending Jun-10 | 7 | 0.00 | 0.01 | -0.03 | 0.03 |
| Quarter Ending Sep-10 | 7 | 0.01 | 0.03 | -0.02 | 0.07 |
| Year Ending Jun-10 | 7 | 0.02 | 0.04 | -0.01 | 0.08 |
| Year Ending Jun-11 | 7 | 0.06 | 0.14 | -0.02 | 0.30 |
| LT Growth Rate (%) | 3 | 20.67 | 27.00 | 15.00 | 10.00 |
Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=OPWV.O
Investment Highlights
OPWV recently announced that Alfa, the Lebanese mobile operator managed by Orascom Telecom Holding (OTH) since February 2009, has selected Openwave® Integra, a next generation service mediation and policy management solution designed to allow Alfa to effectively manage, monitor and monetize mobile traffic. Alfa was using Openwave® Mobile Access Gateway (MAG) and has recently upgraded to Integra.
Openwave Integra provides network operators an evolutionary roadmap with innovative services and benefits including:
- The reduction of TCO through a single point of policy control and management for mobile data services.
- Scaling capabilities to support 3G and 4G service deployments.
- Cost efficient evolutionary roadmaps from existing WAP gateways to next-generation data architecture.
- Seamless backward compatibility with WAP infrastructure.
- Supports highly differentiated services across a number of service protocols (HTTP, HTML, RTSP/RTP/RDT).
About Alfa
Alfa is the brand name of the first Lebanese mobile network managed by “Orascom Telecom Holding” (OTH) since February 2009.
Alfa capitalizes on OTH expertise in the telecom field in order to deliver a global and professional solution for the GSM sector in Lebanon. Alfa has over one million subscribers. For more information: www.alfa.com.lb.
About Orascom Telecom
Orascom Telecom is a leading international telecommunications company operating GSM networks in high growth markets in the Middle East, Africa and Asia, having a total population under license of approximately 510 million with an average mobile telephony penetration of approximately 49% as of December 31, 2009. Orascom Telecom operates GSM networks in Algeria (“OTA”), Pakistan (“Mobilink”), Egypt (“Mobinil”), Tunisia (“Tunisiana”), Bangladesh (“banglalink”), North Korea (“koryolink”) and Canada (“Wind Mobile”) through its indirect equity shareholding in Globalive Wireless. In addition it has an indirect equity ownership in Telecom Zimbabwe (Zimbabwe) and through its subsidiary Telecel Globe; OTH also operates in Burundi, the Central African Republic and Namibia. Orascom Telecom had almost 93 million subscribers as of December 31, 2009.
Source: http://www.openwave.com/
Technical Analysis
Source: http://stockcharts.com
OPWV is below its 50-day moving average. This bearish sign is even more significant because the moving average is also trending lower.
OPWV’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, OPWV is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.
The MACD for OPWV currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.
Comparative Analysis
| Company Name | Ticker | Price per | Mrkt. Cap. | P/E | P/S | ||
| May-10-2010 | symbol | Share, $ | $ Mn | 2009 | 2010 | 2009 | 2010 |
| InfoSpace Inc. | INSP | 9.40 | 355.09M | 46.34 | n/a | 1.60 | n/a |
| Ulticom Inc. | ULCM | 9.99 | 111.06M | n/a | n/a | 2.38 | n/a |
| Nextwave Wireless Inc. | WAVE | 0.40 | 62.86M | n/a | n/a | 1.02 | n/a |
| Drug Manufacturers Median | 176.33M | n/a | n/a | 1.66 | n/a | ||
| Openwave Systems Inc. | OPWV | 2.47 | 206.09M | n/a | n/a | 1.00 | n/a |
Source: Thomson Financial
Insider Trading Activity
| NET SHARES PURCHASE ACTIVITY
Inside Purchases – Last 6 Months |
||
| Shares | Transaction | |
| Purchases | n/a | 0 |
| Sales | 773,900 | 1 |
| Net Shares Purchased (Sold) | (773,900) | 1 |
| Total Insider Shares Held | 774.58K | n/a |
| % Net Shares Purchased (Sold) | (50.0%) | n/a |
| Net Institutional Purchases — Prior Qtr to Latest Qtr | |
| Shares | |
| Net Shares Purchased (Sold) | (6,604,680) |
| % Change in Institutional Shares Held | (12.7%) |
Source: Yahoo Finance
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